South Korean government officials have created confusion this year with conflicting announcements about a possible repeal or amendment of the next cryptocurrency tax that will take effect in 2022.
Throughout 2021, the debate has increased in intensity in the National Assembly, South Korea's legislature, on whether or how to amend the crypto tax. If left unchanged, the tax will impose a 20% tax on income generated from crypto transactions that exceed 2.5 million Korean won, or about $ 2,100.
The NFT regulations are the latest example of confusion about crypto assets in the country.
On November 5, FSC officials definitively declared that the NFTs would not be subject to crypto tax based on the FATF guidelines that classify NFTs differently than cryptocurrencies.
But that decision was effectively reversed yesterday when FSC Vice President Do Gyu-sang said:
"The Ministry of Strategy and Finance is preparing tax provisions for NFTs in accordance with the Special Reports Law."
The Special Reports Act dictates regulations for cryptocurrencies, including taxes.
Some are skeptical that the government has the best interests of the crypto industry in mind, as the direction of official policy seems to change direction so frequently. Nam Doo-wan by Stablenode tweeted Today: "Korean Government: 'We Could Change Our Position, But You Crypto Heads Will Be Slapped Until That Happens.'"
Since April 2021, various proposals to delay the Democratic Party tax, which has the majority in the legislature, has gained momentum in the National Assembly until Finance Minister Hong Nam-ki of the opposition People's Power Party canceled them. the the same happened in september, and it will probably happen again before the year is out.
While the conflict between opposing parties is a fact, there is also an element of misinformation, as the media has done so. reported incorrectly that the tax has been delayed. This is a source of confusion for stakeholders in the Korean crypto industry and is compounded by non-Korean-speaking journalists reporting on the issues.
Jun Hyuk Ahn, Head of Communications at Vegax Holdings told Cointelegraph: "With the presidential elections approaching next March, the Democratic Party is trying to win the favor of the 20-30 age group by delaying the tax."
Related: South Korea's leading blockchain faces increased competition in the NFT market
Although FSC has shown that there is an internal conflict as to how to enforce the law as it is written, Ahn noted that, "The power is in the National Assembly to change the law."
The ability to change the law has finally been hampered by partisan politics in the National Assembly, where the Democratic Party has had to confront Minister Hong.
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