South Korean lawmaker Park Soo-young has intensified opposition to the country's planned 22% cryptocurrency investment tax, calling for its immediate withdrawal before the January 1, 2027 implementation date. Speaking on his YouTube channel "Park Soo-young's Economy TV" on August 13, Park described the tax as a "punitive policy that holds 13 million digital asset users hostage" and warned it could drive more Korean capital toward overseas cryptocurrency markets. The lawmaker argued that removing the investment tax while retaining a separate levy on virtual assets amounts to telling investors they could face a "tax bomb" if they choose not to invest in the domestic stock market, comparing the treatment unfavorably with South Korea's decision to abolish the planned financial investment income tax for ordinary investors.
Park's warnings gain credibility from recent data showing significant capital movement away from Korean platforms. According to Financial Services Commission data released in March, South Korean exchanges recorded ₹90 trillion ($60 billion) of crypto outflows during the second half of 2025, representing a 14% increase from ₹78.9 trillion in the first half. Park cited data showing that roughly ₹124 trillion flowed into overseas digital asset exchanges between January and September last year, supporting his argument that the tax could accelerate the movement of Korean wealth overseas rather than redirecting capital toward domestic equities as the government hopes.
Under the current Income Tax Act, income earned by transferring or lending cryptocurrencies, including Bitcoin and Ethereum, will be classified as other income beginning January 1, 2027. Annual gains above ₹2.5 million won will face a combined rate of 22%, consisting of a 20% national income tax and 2% local income tax. The ₹2.5 million deduction is the same basic deduction applied to capital gains from overseas stocks, while South Korea no longer plans to introduce the financial investment income tax that would have covered certain domestic financial investments. Investors earning taxable cryptocurrency income during 2027 would report it for the first time in May 2028.
Despite mounting opposition, the government has maintained its commitment to proceed with the existing 2027 deadline. In May, Moon Kyung-ho, director of the Ministry of Economy and Finance's income tax division, publicly confirmed that authorities were preparing to introduce the tax on schedule, as reported by crypto.news. The National Tax Service has been preparing implementation guidance with South Korea's five major crypto exchanges: Upbit operator Dunamu, Bithumb, Coinone, Korbit and Gopax, with guidance expected in 2026 and the first full filing period coming in May 2028 for income earned during 2027. The government has said it intends to proceed under the existing law, while no clear opposition to implementation has emerged from the ruling party.
The taxation dispute continues amid broader regulatory developments. The People Power Party introduced legislation in March seeking to amend the Income Tax Act and abolish the crypto tax before it takes effect, with lawmaker Jeong Seong-guk planning to introduce an amendment moving implementation from January 1, 2027 to January 1, 2030. A public petition seeking complete repeal of the levy crossed the 50,000-signature threshold in May, automatically sending the proposal to a National Assembly committee for review. The disagreement has left the January 1 deadline dependent on whether lawmakers change the Income Tax Act before implementation, while South Korean regulators continue working on a new regulatory framework for the cryptocurrency sector, including a consolidated Digital Asset Basic Act that would combine work surrounding 10 digital asset proposals.
