South Korea’s ruling People Power Party is moving to delay taxation on virtual assets, or cryptocurrencies. The party argues that pressing ahead with the levy under the government’s current timetable would create confusion because the relevant systems remain unprepared.

Rep. Jung Jeom-sik, the party’s floor leader, made the remarks at a Sept. 21 policy meeting at the National Assembly on improving the digital-asset tax system. “The principle of taxing income where income exists is important,” Jung said. “But we need to take another close look at whether the institutions and systems needed to tax digital assets fairly and accurately are fully prepared.”

The meeting came about three months before crypto taxation is due to take effect in January 2027. Attendees included Jung, Rep. Lim I-ja, the party’s policy committee chair, Rep. Seo Il-jun and Rep. Song Eon-seok. Industry participants included Dunamu CEO Oh Kyung-seok, Bithumb CEO Lee Jae-won and Digital X CEO Oh Se-jin, along with executives from major domestic crypto exchanges.

Jung said concerns from the industry remain unresolved. He noted that it can be difficult to accurately verify acquisition costs and transaction records for trades routed through overseas exchanges or wallets. Standards also remain unclear on how to reflect gains and losses from new forms of transactions.

He added that many younger investors have entered the digital-asset market at a time when jobs are hard to find and buying a home on wage income alone is difficult. If taxation is rushed through without adequate preparation, the resulting confusion and burden will ultimately fall on young investors. With the financial investment income tax already abolished, he added, there is also a need to review whether crypto taxation is fair.

Tax System Falls Short, Raising Risk of Investor Confusion

Lim said at the meeting that if taxation is introduced before the system and infrastructure are fully ready, the resulting confusion and burden will inevitably fall on investors and market participants. For taxes to be collected, it must be clear what is being taxed and taxpayers must be able to predict how much they owe, she said. But crypto taxation still lacks a sufficient system to verify the basic data needed to calculate gains, including purchase prices.

She also referred to the Digital Asset Basic Act, which is now under discussion in the National Assembly. Work to define the legal nature of digital assets and establish a basic institutional framework should move in step with the tax regime, she said, meaning it would be premature to enforce crypto taxation before the basic law is enacted.

Party officials also argued that the revenue effect would not be significant. Rep. Choi Soo-jin, the People Power Party’s senior floor spokesperson, told reporters after the meeting that implementing the tax under current conditions would create market confusion and ultimately weaken the market. Any increase in tax revenue could be outweighed by weaker domestic trading and an outflow of investment funds overseas, she added.

She also said that with the Digital Asset Basic Act not yet enacted, even core terminology has not been clearly defined. The current tax framework has broader problems, in the party’s view.

Public Hearing to Be Held Soon to Gather Views

The People Power Party’s position is that crypto taxation should ultimately be abolished. Choi said the party line is that taxing digital assets at this stage would be excessive. It plans to hold a public hearing soon to gather additional views on the issue.

She added that abolishing crypto taxation is the right approach in principle. If taxation could damp investment, the party plans to move in the direction of scrapping it.

The government, meanwhile, maintains that it will proceed with full-scale crypto taxation from January 2027 as scheduled. To prepare, the National Tax Service created a dedicated Digital Asset Division in July and plans to release tax guidelines as early as October 2026.

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