South Korea's largest opposition party proposes to abolish the cryptocurrency income tax plan set to be implemented in 2027

According to The Block, South Korea's largest opposition party, the People Power Party, has submitted a bill to the National Assembly proposing the complete abolition of the cryptocurrency capital gains tax plan scheduled to take effect on January 1, 2027. The bill was primarily proposed by the party's representative in the National Assembly, Song Eon-seok.

Under the current tax scheme, South Korea plans to impose a maximum tax rate of 22% on cryptocurrency trading gains exceeding 2.5 million won (approximately $1,665), consisting of a 20% national income tax and a 2% local tax. This tax plan has been postponed three times since 2022. The core argument of the bill is based on tax fairness.

By the end of 2024, South Korea has abolished income tax on traditional financial investment gains such as stocks, and the proponents argue that taxing cryptocurrency investors separately is unfair. The bill also cites the recent guidance from the U.S. Securities and Exchange Commission (SEC) that classifies most cryptocurrencies as commodities, asserting that cryptocurrencies should not be treated the same as securities.