The party proposed a solution by increasing the lower limit of taxation on earnings to 50 million won (about $36,000), ensuring that only large investors would be affected. This plan is considered a move against the People Power Party’s (PPP) attempt to postpone the crypto tax to 2028.

According to a report published by Seoul Shinmun Daily on November 20, the KDP strongly opposed the PPP’s tax deferral proposal. PPP made a proposal in July to delay the taxation of crypto gains until 2028.

However, KDP argued that this plan would be used as a political strategy by the PPP. For this reason, KDP insists that the planned tax implementation will be implemented in 2025. However, they stated that they were open to raising the lower limit for taxable capital gains.

According to KDP’s new proposal, crypto investors will pay 20% tax on gains exceeding 50 million won. This regulation will have a structure parallel to the existing taxation limit for stocks.

The current plan calls for a tax on earnings exceeding 2.5 million won (about $1,800). However, this limit received serious criticism from industry representatives and investors.

KDP is of the opinion that increasing the lower limit will virtually eliminate the crypto tax. The party argues that thanks to this regulation, only investors making large profits will be affected and general investors will be exempt from this tax. KDP believes that this new limit will eliminate the negative effects on small investors.

South Korea’s crypto earnings tax plan would first be implemented in 2021. However, upon intense reactions from industry representatives and investors, the government postponed the implementation to 2023. Later, taking investors’ concerns into consideration, the authorities moved the implementation date to January 1, 2025.

KDP argues that this new plan will only target large investors. The party states that this regulation will create a more fair tax system and will not have a negative impact on the development of the sector. He also predicts that the 50 million won cap will not dampen investors’ interest in crypto.

Although PPP’s postponement plan has been generally supported by players in the sector, KDP considers it a political tactic. If a compromise is reached between the two parties, a 20% capital gains tax could go into effect by 2025. However, it remains a matter of curiosity how this tax will affect investors, especially those who make large profits.

As a result, crypto tax discussions in South Korea are increasing tensions between investors and politicians. However, KDP insists that the new regulation will not negatively affect the sector and only big players will be targeted.

This shows that taxation policies on the crypto market will be frequently discussed in South Korea until 2025.