South Korea’s Finance Minister reiterated that the postponement of the encryption tax law “damages the consistency of policies” - Aliens: AI Crypto News & Markets Updates

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South Korea’s Finance Minister reiterated that the postponement of the encryption tax law “damages the consistency of policies”

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Aliens

Wed, Nov 10, 2021

In January this year, South Korea’s Ministry of Planning and Finance announced an amendment to the Income Tax Law. It was soon met with strong opposition from virtual asset investors. The revised law stipulates that if the profit of cryptocurrency transactions exceeds 2.5 million won (approximately US$2,120), the National Tax Agency will impose a 20% tax. Cryptocurrency investors have criticized many aspects of the new tax plan and timetable. The ruling Democratic Party and the conservative National Forces Party took into account the sentiments of the people and proposed a plan to postpone the cryptocurrency tax for 1 to 2 years. Even the Democratic presidential candidate Lee Zaiming said that he will push forward the plan to postpone the collection of virtual asset taxes during the campaign.

At the same time, Finance Minister Hong Nanji stated in Congress today that the postponement of the encryption tax law “damages the consistency of policies.” He also said it is reasonable to levy taxes where profits are generated-reiterating that the encryption tax law should proceed as planned. He then said on behalf of the government: "even if there’s an agreement between the ruling and conservative party, the government is not in favor of the delay in taxation." Hong Nanji also said: "The government has the ability to build a taxation system within this year."

However, an expert said this is not possible. "[The government] can tax virtual assets on exchanges but as we all know, that’s not all. If you think about it, peer-to-peer (P2P) transactions are also a large part of crypto trading. If it taxes crypto on exchanges when it’s not able to do the same to P2P transactions, less will be using exchanges." Professor of Taxation and Accounting at Hanyang Women’s University Oh Moon-sung said, “If one moves a token from one exchange to another, and then several more times in different exchanges, it’s very hard to specify the original acquisition cost.” He also said that if taxes on virtual assets are hurriedly More people will seek tax evasion avenues.

Earlier news, Hong Nanji said that the government will tax the proceeds of virtual assets. These include cryptocurrency as planned next year. He also said that the necessary infrastructure is already in place, and further delaying the taxation plan will damage the reliability of government policies. When asked whether it is possible to levy taxes on virtual assets starting next year as planned, he said: "Yes." Hong Nanji pointed out that taxes may be imposed on virtual assets traded under the real-name system and through exchanges.

Source: Forkast

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