South Korea Opposition Proposes Crypto Tax Abolition

South Korea's main opposition People Power Party has introduced a bill to abolish a planned 22 percent tax on cryptocurrency gains, set to take effect on January 1, 2027, reigniting a long-standing debate over digital asset regulation in one of the world's largest crypto markets.

The proposal, submitted by party floor leader Song Eonseok, seeks to amend the Income Tax Act by removing all provisions related to taxing digital asset income. Under the current framework, approved by the National Assembly in 2020, investors would face a 20 percent national income tax plus a 2 percent local tax on annual crypto profits exceeding 2.5 million Korean won, equivalent to about 1,800 U.S. dollars. The measure has already been delayed three times since its initial target date of 2022, amid political disagreements and concerns from the cryptocurrency industry.

Lawmakers from the People Power Party argue that the tax creates inequities compared to other investments. They note that South Korea repealed income taxes on gains from stocks and other financial assets in late 2024 to bolster capital markets, yet retained the crypto levy, leaving digital asset holders at a disadvantage. The party also...