Will South Korea’s People Power Party overturn the crypto tax, and can the June election reverse the poll slump?

Gate News message: South Korea’s People Power Party recently proposed a new bill, calling for the repeal of the 22% tax on profits from cryptocurrency trading that takes effect on January 1, 2027. The party hopes this will help win support from younger voters and improve its performance in the June local elections. However, analysts say this may just be a political tactic—a last-ditch attempt to win votes.

The South Korean cryptocurrency market is highly influential. Data shows that more than 16 million residents hold cryptocurrency accounts, accounting for about one-third of voters, with significant potential vote value. The People Party for Progress (PPP) has also taken note of the importance of domestic cryptocurrency trading. Lawmaker Park Suh-ryeong said that taxing could lead to capital outflows and weaken the vitality of the domestic market. However, some traders have expressed skepticism about this sudden focus, saying that parties are more interested in political maneuvering than in truly looking out for investors’ interests.

The controversy over cryptocurrency taxes in South Korea has a history of many years. Since 2020, the two major parties have repeatedly postponed cryptocurrency tax measures, each time occurring right before elections. The tax rates include a 20% flat tax and a 2% local tax, applying to trades with annual profits exceeding $1,665. Many traders say they have no plans to pay taxes anytime soon, believing that the political game will continue.

As the June election approaches, polls show that the PPP is trailing the ruling Democratic Party of Korea in multiple traditional strongholds, and President Lee Jae-myung has 69% approval. Observers believe the cryptocurrency tax issue could become a short-term focus ahead of the election, but its real impact remains hard to predict. Seoul trader and part-time office worker Kim Se-hyun said that at this stage, it is difficult to take either side’s position on the cryptocurrency tax seriously, and that over the next few months the bill may be postponed again or modified.