Newly elected South Korean President Yoon Suk-yeol has said that a cryptocurrency tax will not be introduced until consumer protection is legislated.
The taxation of cryptocurrency profits was originally scheduled to come into force in the 2022. This initial plan is being delayed until a new package of regulations, called the Digital Asset Base Act (DABA), is adopted. According to the E-daily, President Yoon will ensure that the cryptocurrency taxation law is not passed before sensible consumer protection legislation is in place.
Since March, the South Korean presidential team has been working on the ways to legislate a tax against cryptocurrency profits. DABA was drafted this year by the Financial Services Commission (FSC) and contains a number of consumer protection laws. These laws address in more detail the issues of token issuance, non-working tokens (NFTs), centralized exchange exchanges (CEXs), and reflect Joe Biden’s regulations on cryptocurrencies.
Under DABA, the FSC plans to introduce crypto-insurance as a safeguard against hackers, system errors, and unauthorised transactions. The Deferred Crypto Tax Act would impose a 20% tax on profits from crypto investments over $2,100 per year.
Simon Kim, CEO of venture capital firm Hashed, told Cointelegraph on Wednesday that, “It makes no sense to impose a tax on cryptocurrencies before the relevant laws are passed, which clearly define the scope of cryptocurrency-related business and are a prerequisite for taxation.” “Without thorough research, the enforcement of cryptocurrency taxation may result in various mishaps and raise serious fair taxation issues, as an investor protection system for cryptocurrencies has not yet been put in place.”
While the FSC is working on drafting new laws under DABA, Yoon plans to establish a Digital Industry Agency to serve as a springboard for regulatory issues in the crypto industry.
