Finance and Economy Minister Hong Nam-ki answers questions during a parimentary hearing seasion on Wednesday. (Yonhap)
South Korea’s finance minister once again downplayed the possibility of delaying taxation on cryptocurrency earnings, while emphasizing that his ministry is gearing up to carry out its plan as scheduled.
Hong Nam-ki, the minister of Finance and Economy, made such remarks during an Assembly hearing on Wednesday when asked about the preparedness of taxation infrastructure on crypto assets.
Hong’s remarks came one day after a lawmaker revealed a survey result in which three crypto exchanges said it would be impossible to complete the taxation system within this year. In response to this survey result, the Ministry of Finance and Economy emphasized its ongoing preparation is thorough in a press release on Tuesday.
Exchanges have been raising issues over difficulties of sharing cryptocurrencies’ track of record. It is difficult to know the buying price of a bitcoin if it is transferred from one exchange to another, they said.
In response to such concerns, the ministry said it plans to set up a measure to share this information upon users’ agreement.
In addition, the ministry said that it was creating a set of tax codes for those who live outside the country.
Starting from Jan. 1, the government is poised to levy a 20 percent tax on capital gains for cryptocurrency above 2.5 million won. However, some lawmakers suggest a delay in taxation or revising the law in accordance with the Financial Investment Income Tax, which is to be implemented starting from 2023. The Financial Investment Income Tax levies a 20 percent tax on capital gains between 50-300 million won ($42,000-$251,000) and 25 percent for profits above 300 million won.
By Park Ga-young (firstname.lastname@example.org