The South Korean government recently announced its intention to impose a tax on crypto currencies, which led to general discontent. Korean economist Sung Tae-yoon of Yonsei University warned that the decision to tax profits from cryptomonies could slow down the emerging technology market, according to Koreatimes on June 21.
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Sung said that taxing the crypto market while it is still in its infancy is a „premature“ decision. He is concerned that strict regulations or taxes could prevent the crypto industry from thriving in South Korea. He also believes:
„Crypto coins cannot be considered a universal asset, like traditional paper coins.“
The reasons behind this
Opposition economists, such as Kim Jin-ill of Korea University, believe that regulation is essential, even when it can block market growth. However, some critics believe that the government is imposing new taxes because of the fiscal uncertainty caused by the COVID-19 pandemic.
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According to the news, the government plans to tax more than just cryptosystems. They quoted Korea’s finance minister, Hong Nam-Ki, who said:
„In reforming the tax system this year, we will consider introducing new types of taxes, such as the digital tax … The digital tax refers to an additional tax for foreign IT companies, such as Google and Amazon, for their online business activities.“
As Cointelegrah reported earlier, Portugal became a friendly country in terms of regulating crypto currencies, as it has zero taxes for crypto currency traders and miners.