South Korean lawmaker Park Soo-young has urged the government to cancel its planned 22% tax on cryptocurrency gains before it takes effect on January 1, 2027, arguing that the measure unfairly targets millions of digital asset investors.
Park criticized the proposal during a recent appearance on his YouTube channel, calling it a punitive policy that could drive more investment capital out of South Korea and into overseas crypto markets.
The lawmaker pointed out that South Korea has already abandoned plans to introduce a broader financial investment income tax on domestic stocks and other financial assets. He argued that maintaining a separate tax on cryptocurrency profits while exempting other investments creates an unfair imbalance.
Under current law, profits from cryptocurrency trading and lending will be taxed as “other income” starting in 2027. Investors will receive an annual tax-free allowance of 2.5 million won, while gains above that amount will face a 20% tax. After adding local income tax, the effective rate rises to 22%.
Despite growing opposition, the government has repeatedly stated that it intends to move forward with the tax as scheduled. Authorities are already working with major domestic cryptocurrency exchanges to prepare reporting and compliance systems ahead of implementation.
Park also warned that the tax could encourage investors to move funds to overseas exchanges rather than into the domestic stock market. According to him, taxing crypto profits is unlikely to change investor behavior in the way policymakers expect and could instead lead to more capital leaving the country.
Another concern raised by Park is the treatment of investment losses. He argued that the proposed system allows the government to tax gains while providing limited relief for investors who suffer losses during market downturns.
The planned tax has faced criticism from both investors and opposition politicians. South Korea’s People Power Party has previously introduced legislation seeking to abolish or further delay the tax, which has already been postponed several times since it was first proposed in 2020.
Public opposition has also grown. Earlier this year, a petition calling for the repeal of the crypto tax gathered enough signatures to trigger a formal review by a National Assembly committee.
For now, the tax remains scheduled to take effect on January 1, 2027. However, ongoing political debate and pressure from lawmakers could influence whether the government proceeds with the plan or considers further changes before the deadline.
