More than 50,000 South Koreans have signed an online petition, surpassing the official threshold required to send the document to the National Assembly. Their primary demand targets the digital asset taxation plan, calling for a full two-year postponement from the initial implementation date set for January 1, 2027.
South Korea previously designed a tiered tax framework for the digital asset ecosystem. The government plans to levy a 20% national tax on all forms of income, including crypto transfer and lending activities. An additional 2% local income tax brings the total deduction borne by investors to 22%. Under the currently proposed scheme, taxpayers receive an annual basic deduction of just 2.5 million won, equivalent to roughly $1,850.
Is the Tracking Infrastructure Ready?
The signatories’ main grievance centers on the unreadiness of the government’s own infrastructure. The petition’s author argues that South Korean authorities lack an adequate system to accurately calculate taxpayer profits. Crypto transaction flows are not centralized in one place, but rather fragmented across various domestic exchanges, overseas platforms, and users’ private wallets.
The petitioner demands that lawmakers and tax authorities use the two-year delay to resolve these on-the-ground technical complexities. Transaction history tracking, cross-platform acquisition cost calculations, and legal enforcement mechanisms remain unanswered blind spots in the current regulations.
Threat of Investor Exodus Overseas
The call for postponement is also driven by market conditions that have yet to recover. The petition claims that the majority of domestic crypto investors are still bearing heavy financial losses from past price volatility. Imposing a 22% tax levy in the near future is feared to put further economic strain on younger investors who dominate the market.
Implementing the rule also risks triggering adverse side effects that could harm state revenue. There is major concern that investors will respond to the high tax by transferring their assets to overseas exchanges. If a mass capital flight occurs amid sluggish trading activity, the government could face minimal tax revenue from the crypto sector.
Not the First Delay
Crossing the 50,000-signature threshold does not guarantee that the demands will be granted. The figure merely mandates the relevant committee in the National Assembly to review the document at the legislative level. This process does not automatically alter the legislation, nor does it guarantee a vote on the assembly floor.
South Korea’s digital asset tax plan has a long history. This demand is not the first; the government has previously postponed the crypto tax implementation timeline several times from its original plan. For policymakers in the National Assembly, pressure from tens of thousands of signatories once again highlights that formulating a tax rate is far easier than establishing a viable collection mechanism.
Reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
