South Korea’s Democratic Party (KDP) is reigniting the crypto tax debate, proposing a 20% tax on cryptocurrency gains to take effect in 2025 while significantly raising the threshold for taxable income. The move counters the ruling People’s Power Party’s (PPP) proposal to delay the tax until 2028, which the KDP has criticized as an election strategy.

Originally, the tax plan called for a 20% levy on crypto gains exceeding 2.5 million won (approximately $1,800). However, backlash from crypto investors and stakeholders led to delays. The KDP now proposes raising the threshold to 50 million won (around $36,000), aligning it with the tax policy for stock investments. This change aims to limit the tax’s impact to high-earning crypto investors, potentially exempting smaller traders altogether.

The KDP argues that raising the threshold makes the tax more equitable, stating that the effect would be negligible for most investors, as few generate profits above $36,000. They further criticized the PPP’s tax delay plan, accusing the ruling party of using it as a political maneuver for upcoming elections.

The tax, initially slated for 2021, has faced repeated postponements due to resistance from industry leaders and investors. It was most recently delayed to 2025. The KDP insists that an earlier implementation is necessary for fairness and to regulate the rapidly growing crypto market.

As discussions between the KDP and PPP continue, the fate of South Korea’s crypto tax remains uncertain. However, with both parties presenting opposing strategies, the final decision is likely to have a significant impact on the country’s crypto investors.