- South Korea opposition pushes to scrap planned crypto tax before rollout
- Lawmakers argue crypto taxation unfair after stock tax removal decision
- Political divide grows as crypto tax debate intensifies ahead 2027
Momentum is building in South Korea’s political arena as lawmakers revisit the country’s long-delayed cryptocurrency tax framework. A fresh proposal now seeks to eliminate the planned levy before it even takes effect, signaling a renewed clash over how digital assets should be treated. South Korea’s right-leaning People Power Party has introduced a bill to abolish the upcoming tax on cryptocurrency gains. The proposal, sponsored by floor leader Song Eon-seok, aims to amend the current Income Tax Act. If approved, it would remove the scheduled taxation set to begin on January 1, 2027.
Under the existing plan, authorities intend to impose a 22% tax on crypto profits exceeding 2.5 million Korean won. This includes a 20% national tax and a 2% local tax. However, policymakers have already delayed implementation three times since its original 2022 timeline. Moreover, the debate comes as regulators advance new surveillance tools. The National Tax Service recently confirmed it is developing an artificial intelligence system to track crypto transactions.
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Political divide deepens over fairness in crypto taxation
Supporters of the new bill argue that the current framework lacks fairness across investment categories. In late 2024, South Korea removed income taxes on certain traditional financial investments, including stocks. Additionally, the bill references recent regulatory developments in the United States. Lawmakers pointed to guidance suggesting many cryptocurrencies fall under commodities rather than securities. Based on this view, they argue crypto should not face stricter tax treatment than other assets.
However, resistance remains within the ruling Democratic Party. Senior policymaker Kim Han-gyu stated that discussions will take place, although the proposal has not gained serious traction internally. This response highlights the ongoing divide between the two major political blocs.
Market size raises stakes for policy decision
Meanwhile, South Korea continues to rank among the largest cryptocurrency markets globally. Nearly 20% of the population participates in digital asset trading or investment. Data from the Financial Services Commission shows the market reached 95.1 trillion won in capitalization by mid-2025.
Furthermore, the scale of adoption increases the stakes of any regulatory shift. Policymakers must balance investor protection, tax equity, and market growth. As a result, the outcome of this proposal could influence broader crypto policy direction in the region.
South Korea’s latest proposal introduces new uncertainty around its long-debated crypto tax policy. While opposition lawmakers push for full abolition, ruling party leaders remain cautious. The final decision will likely shape how one of the world’s most active crypto markets evolves in the coming years.
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