South Korea To Revisit Crypto Tax Plan After Repeal Petition Tops 50,000 Signatures

South Korean lawmakers are expected to review their crypto tax plan after a petition to abolish the long-delayed framework surpassed the required signatories to be discussed in the National Assembly.

The “Petition for the Abolition of Taxation on Virtual Assets” surpassed the signature requirement on May 21, just eight days after its registration. Notably, a petition must gather 50,000 signatures within 30 days of public release to be automatically referred to the National Assembly for review.

For context, crypto assets will be subject to an income tax rate of up to 22%, starting January 1, 2027, for profits exceeding 2.5 million won annually. The South Korean government proposed implementing the Income Tax Act by January 2022, but the rule change has been postponed three times.

“There are significant concerns that current policies are excessively focused on regulation and securing tax revenue, while neglecting consideration for industrial competitiveness and securing global market leadership,” the request affirmed, adding that, “If taxation is enforced solely for the sake of short-term revenue, it could lead to greater long-term losses, such as industrial contraction and the outflow of capital and talent.”

It also criticized the push to implement taxation before measures like short-selling regulations, listing reviews, investor protection funds, and unfair trading monitoring systems are sufficiently established.

Therefore, the petitioner considers that the crypto asset taxation system requires “a fundamental review rather than mere supplementation or postponement,” noting that the current system will only result in increased burdens on the public and a contraction of the industry. “Now is the time for a comprehensive re-discussion, including the possibility of abolition, rather than forcing through virtual asset taxation,” it reads.

As reported by Bitcoinist, the bill argues that imposing a separate income tax on crypto assets raises concerns regarding the fairness and consistency of the tax system. In addition, it cites guidance from US financial regulators, which classified most digital assets as commodities rather than securities.

The NTS is also accelerating the development of its tax infrastructure, including an AI-driven system to track crypto investment gains, which the agency expects to launch at full scale by the end of the year.