PPP Says Delay, Repeal of Crypto Tax Is Party Policy as Terms, Systems Remain Unsettled

South Korea’s ruling People Power Party is moving to formally pursue a delay in virtual-asset taxation, arguing that pressing ahead with the levy under the government’s current timetable would cause confusion because the related systems remain inadequate.

Kweon Seong-dong, floor leader of the People Power Party, made the remarks on Sept. 21 at a policy meeting at the National Assembly on improving the digital-asset tax system. While the principle of taxing income is important, authorities need to take another close look at whether the institutions and systems needed to tax digital assets fairly and accurately are fully ready, he said.

The meeting was held about three months before virtual-asset taxation is due to take effect in January 2027. Attendees included Kweon, People Power Party policy chief Lim I-ja, and lawmakers Seo Il-jun and Song Eon-seok. Industry participants included Dunamu CEO Oh Kyung-seok, Bithumb CEO Lee Jae-won and DigitalX CEO Oh Se-jin.

Kweon said concerns from the market remain unresolved. For transactions routed through overseas exchanges or wallets, it can be difficult to accurately verify acquisition costs and trading records. Standards also have yet to be clearly established for how to reflect gains and losses from new forms of transactions.

He added that many younger South Koreans are participating in the digital-asset market at a time when jobs are hard to secure and buying a home is difficult on wage income alone. If taxation is rushed without adequate preparation, the resulting confusion and burden will inevitably fall on younger investors. With the financial investment income tax already abolished, he said, policymakers also need to examine whether taxing virtual assets is equitable.

Inadequate Tax Framework Could Confuse Investors if Enforced

Lim said at the meeting that if taxation is implemented before the system and infrastructure are fully prepared, the confusion and burden will ultimately fall on investors and market participants. To collect taxes, it must be clear what is being taxed, and taxpayers must be able to predict how much they owe. But calculating gains requires knowing the purchase price, and the current virtual-asset tax framework still lacks a sufficient system to verify such basic data, she said.

She also referred to the Digital Asset Basic Act, which is under discussion in the National Assembly. Efforts to define the legal nature of digital assets and establish a basic institutional framework need to move in step with the tax regime, she said, adding that implementing virtual-asset taxation before the basic law is enacted would be premature.

Party officials also said the tax would likely have only a limited revenue effect. Choi Su-jin, the People Power Party’s senior floor spokesperson, told reporters after the meeting that introducing the tax under current conditions would disrupt the market and ultimately shrink it. Any increase in tax revenue could be outweighed by weaker domestic trading and an outflow of investment funds overseas, she added.

Choi said the Digital Asset Basic Act has yet to be enacted, meaning even key terminology has not been fully defined. For that reason, the party sees broad problems with the current tax framework.

Public Hearing Planned as Party Seeks More Views

The People Power Party’s position is that virtual-asset taxation should ultimately be abolished. Choi said it is the party’s official line that taxing digital assets is still too difficult at this stage. The party plans to hold a public hearing soon and gather additional views on the issue.

In principle, abolishing virtual-asset taxation is the right approach, she said. If the tax risks discouraging investment, the party plans to move toward repeal.

The government, however, plans to proceed with virtual-asset taxation next year as scheduled. To prepare, the National Tax Service created a dedicated Digital Asset Division in July and plans to issue tax guidelines as early as October 2026.

Lee Hyoung-il, nominee for deputy prime minister and minister of economy and finance, recently said in a written response submitted to the National Assembly that implementing taxation from 2027 would be desirable under the basic tax principle of taxing income where income exists.