South Korea to review scrapping crypto tax plan after national petition hits 50,000 signatures

South Korean legislators are set to review the possible abolition of the crypto tax plan scheduled to take effect next year, after a national petition surpassed the required number of signatures.

On Thursday, the petition seeking to repeal the planned crypto tax reached the required 50,000 signatures at around 11:23 a.m. local time. This came eight days after the petition was submitted to the National Assembly.

Under the rules of South Korea's national petition program, the motion was referred to a legislative committee on Thursday.

In the motion, the anonymous petitioner argued that taxing gains from cryptocurrencies is unfair for investors, especially after South Korea abolished income taxes on traditional financial investments, such as stocks and bonds.

Fundamentally flawed

Persistent fraudulent activity and substandard token listings continue to expose investors to risk, the motion said, highlighting a significant shortfall in current investor protection frameworks. It added that the current tax plan does not adequately address the high volatility of crypto markets.

"The issue is not simply a debate over tax rates," the petitioner wrote in the translated motion. "It is fundamentally a question of how the government views and plans to nurture the future of the financial industry and digital assets." 

The petitioner pointed to ongoing concerns that the current policy neglects responsibility to foster innovation and competitiveness of the local crypto industry, while placing excessive focus on regulation and tax revenue.

Currently, South Korea is set to levy a 22% tax on crypto income exceeding the 2.5 million Korean won ($1,650) threshold. This tax program has already been delayed three times due to controversy over fairness and underdeveloped infrastructure.

Earlier this month, South Korea's National Tax Service reportedly confirmed that it will move forward with the crypto tax plan as scheduled, despite criticism.