South Korea’s main opposition party, the Democratic Party of Korea (DPK), has agreed to postpone the implementation of a controversial cryptocurrency tax for two years. The decision, announced on Sunday, comes after significant pushback from investors and follows a similar reversal on a planned financial investment income tax just last month.
DPK floor leader Rep. Park Chan-dae explained the decision during a press conference at the National Assembly, stating that further institutional arrangements are needed before virtual asset taxation can proceed. He emphasized that the decision was reached after extensive internal discussions, debate, and political judgment.
The government had originally planned to impose a 22% tax (inclusive of local taxes) on annual virtual asset investment income exceeding 2.5 million won (approximately $1,790) starting in 2025. Despite two previous postponements, the DPK initially aimed to implement the tax next year with a higher exemption threshold of 50 million won.
However, mounting pressure from a growing number of crypto investors, coupled with opposition from the ruling People Power Party (PPP), ultimately led the DPK to concede to a further delay.
The ruling PPP welcomed the DPK’s decision. PPP leader Han Dong-hoon praised the move in a Facebook post, calling it a “good outcome for young people” and adding that “no politics can prevail against the will of the people.” The PPP had advocated for abolishing the tax altogether, arguing that supporting young people’s asset accumulation was a higher priority.
This marks the second time the DPK has backtracked on a tax policy due to investor opposition. On November 4th, the party scrapped plans for a financial investment income tax, citing the “challenging domestic stock market.”
The amendment to the Income Tax Act, incorporating both the crypto tax delay and the abolishment of the financial investment income tax, is expected to be formally approved during the National Assembly’s plenary session on Monday.
