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Over half agree to taxing income from crypto investments

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By Lee Kyung-min

More than half of all Koreans agree that investment income from cryptocurrency should be taxed, according to a local poll, Monday.

However, of those aged between 20 and 29, people against the much-debated idea slightly outnumbered those in favor of it. They remain the only age group voicing opposition to the tax burden on the new investment vehicle that is emerging increasingly as an alternative to assets held in equity or real estate.

The poll came amid the government's unwavering push to tax virtual assets starting January next year, with debate continuing over whether digital coins should be legally recognized as assets at all.

Whether the financial authorities should put in place consumer protection measures is another sticking point, mostly due to calls from young crypto investors ― mostly those in their 20s and 30s. They claim they are left out of the rare opportunity to increase their assets on the back of "overflowing liquidity" in the financial market.

The survey was conducted April 30 by Realmeter of 500 men and women aged 18 and older nationwide. Of them, 53.7 percent said they agreed, whereas 38.3 percent said they disagreed. About 8 percent said they had no opinion.

By gender, 60 percent of women were in favor, while the same answer accounted for only 47.3 percent among men. By age group, 47.8 percent of those in their 20s opposed the idea, surpassing those in favor by a narrow margin (47.5 percent).

People in their 40s showed the highest support for the idea (62.1 percent), followed by those in their 50s (57.2 percent), those in their 30s (55.4 percent) those in their 70s or older (52.6 percent), those in their 20s (47.5 percent) and those in their 60s (45.4 percent).

The Ministry of Economy and Finance said taxes of around 20 percent on gains derived from cryptocurrency trading will be imposed as planned. The ministry will impose the tax after recognizing the gains as "other income," an easier way for the government to levy the tax as opposed to property tax.

The "other income" category under the related tax code is defined as mostly from activities or incidents that lack regularity, consistency and stability. Included are lottery income, lecture fees from non-employers and cash awards for literary works and other prizes.

Property trading-derived capital gains are calculated by the difference between the value purchased and the value sold at a particular date.

By contrast, those categorized under "other income" can be taxed based on income value at the date of taxation.

Rep. Kim Byung-wook of the ruling Democratic Party of Korea said it would be more appropriate for the government to impose tax on the virtual asset after collecting data on the ages of investors and the volume of their investments.

"It is reasonable to delay the date of the tax imposition for a while," he said during a radio interview, April 28. "Times have changed from July last year when nobody expected that investment in digital assets would become this popular."


Lee Kyung-min lkm@koreatimes.co.kr


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