Investors in South Korea may have to wait a little longer to pay taxes on their digital currency holdings. A new taxation scheme was set to take effect in January 2022, but local media claim that the ruling Democratic Party of Korea (DPK) has struck an agreement to go against the government and fight for another postponement.

The South Korean government has pushed for a 20% tax on digital currency earnings of 2.5 million won ($2,125) to be implemented on January 1, 2022. The tax was supposed to go into force this week, on October 1. However, due to a lack of taxation infrastructure for the still-nascent digital currency industry, it was postponed for three more months until next year.

The ruling DPK party has been lobbying for even another postponement, as CoinGeek recently revealed, but the Finance Minister has downplayed the effort.

It now appears that the party may be able to get its way and postpone the tax, which is supported by the majority of Koreans. According to the Korea Times, the party has agreed to seek legislative measures to postpone implementation for at least another year.

The latest attempt by the DPK party is mostly political. The party attempts to entice the younger generation, primarily those in their twenties and thirties, who have made investments in digital currencies. South Korea’s presidential election is scheduled for March of next year, making it even more important for the party to entice investors. The most popular party has been losing support due to outgoing President Moon Jae-catastrophic’s policy decisions, particularly in the real estate business.

“The DPK reached a broad consensus in terms of delaying the timing of the taxation of cryptocurrency transactions for another year than earlier planned,”

a source at the party told the Korea Times.

Aside from deferring the tax, the party is working on certain adjustments, according to the source. The minimal deductible amount is one of them, according to DPK, which is far too low. The maximum deductible amount for Korean investors with more than 60% of their investment in equities is 50 million won ($42,170).

“The amount of tax will be determined by the legal definition of the digital asset. We understand that the difference in the amount deductible between 50 million won and 2.5 million won is unfairly large to many investors,”

Rep. Yong Doo-soo, the head of the DPK’s task force on digital currencies revealed.\


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