South Korea's main opposition party has set forth a proposal to scrap the local tax plan on digital assets that is set to go live in 2027.
The right-wing People Power Party introduced a bill on Thursday to amend the Income Tax Act and fully abolish the planned taxation on cryptocurrency gains, according to local news outlet Digital Asset. The bill is sponsored by Song Eon-seok, floor leader of the party.
South Korea currently plans to levy a maximum 22% tax, comprising 20% national income tax and 2% local tax, on profits from cryptocurrency trading that exceed 2.5 million Korean won (about $1,665). The country had already postponed the adoption of this tax rule three times, as its original 2022 target date was pushed back amid industry and investor backlash.
As it is set to begin on Jan. 1, 2027, the National Tax Service recently announced that it is developing an AI-based system to track and analyze crypto transactions.
The latest bill's rationale for crypto tax abolition centers on fairness and equity in taxation across investment classes. In late 2024, South Korea repealed the broader income tax on other financial investments such as stocks, and critics argue that subjecting only crypto investors to income tax is unfair.
The bill also reportedly mentioned the U.S. Securities and Exchange Commission's recent guidance classifying most cryptocurrencies as commodities, arguing that crypto should not be treated the same as securities.
In response to the proposal, Kim Han-gyu, the senior deputy floor leader for policy of the Ruling Democratic Party, reportedly said that the left-wing party will discuss the bill, although he mentioned that such a proposal had not been seriously considered in the party thus far.
South Korea has one of the world's largest cryptocurrency markets, with nearly one in five of the entire population being crypto users or traders. According to data from the Financial Services Commission, the local crypto market had a total capitalization of 95.1 trillion won, which is around $63.4 billion, as of June 20, 2025.
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