South Korea's virtual asset taxation plan faces opposition from opposition parties, with local elections potentially leading to policy changes

Deep Tide TechFlow News: On May 8, according to ZDNet, the South Korean government plans to impose taxes on virtual assets starting in January next year. However, it faces opposition from opposition lawmakers, increasing policy uncertainty. Moon Kyung-ho, head of the Income Tax Division at the Ministry of Economy and Finance, made his first official remarks at a parliamentary discussion, saying the government will tax virtual assets as originally planned starting January 1 next year, emphasizing, “If there is income, it should be taxed.” Under the current tax law amendment, the portion of income from transferring or lending virtual assets exceeding 2.5 million won is subject to a 22% tax rate.

However, the opposition People Power Party argues that it would be unfair to tax only virtual assets while abolishing the financial investment income tax, and is pushing for a bill to repeal the virtual asset income tax. The bill has been submitted to the National Assembly’s Finance and Economy Planning Committee and will be discussed in the tax subcommittee. Analysts believe that ahead of next year’s local elections, the ruling party may join discussions to delay or repeal the tax in order to win support from young voters.