South Korean economists are unhappy with the government’s proposal to tax Bitcoin and other cryptocurrencies.
Any ‘ cryptocurrency tax ‘ should be abolished and not enforced, the country’s academics told local reporters over the weekend.
The reason for such allegations is one – taxes on the emerging asset class could block wider industrial growth in the country.
Bitcoin taxation is ‘ hasty ‘
South Korea’s economy depends on slow growth and a family business system called ‘ chaebol ‘, which makes entering the labor market challenging, with low wages also a major problem.
Given the above, Korean economists believe that cryptocurrencies are a thriving asset class, while blockchain technology offers long-term growth opportunities for the country.
Ask Sung Tae-Yon of Yonsei University. The Harvard-educated professor says taxing cryptocurrencies is a ‘ premature ‘ decision, given that the digital asset market is still evolving and not as established as other sectors.
Sung believes that cryptocurrencies have a long way to go before they can be regulated like fiat currencies. The professor is right – Bitcoin has existed since 2009, but cryptocurrencies only became famous after 2018.
The above means that cryptocurrencies in all respects are still a new asset class and are only a decade old. Sung explained:
Any reckless taxation or regulation can be an obstacle to the sustainable growth of the industry.
BTC gains must be reported
The decision on a tax on cryptocurrencies in Korea came late last week after years of discussion and parliamentary discussions. Until that date, cryptocurrencies were considered a ‘tax-safe haven’ in the country, with regulators and experts vehemently opposed to their legalization.
Minister Hong Nami said that the taxation of cryptocurrencies in the country will start in July. Individual transactions are unlikely to be taxed, but all profits will have to be reported.
The proposal will bring Korea in line with countries such as Japan, Singapore, the United States and others.
However, this development means that Koreans will be more cautious in trading cryptocurrencies. The country has a dynamic crypto space, with blockchain projects such as ICON and investment funds such as Hashed.