A public petition calling for South Korea to scrap its planned 22% crypto capital gains tax crossed the 50,000-signature threshold on May 22, triggering a mandatory referral to the National Assembly's Finance and Economic Planning Committee under the country's e-petition rules. The petition now carries more than 52,000 signatures, according to the National Assembly's official platform, cited by Cointelegraph.
Under South Korean law, any petition that collects 50,000 or more signatures within 30 days on the National Assembly's e-petition site must be referred to the relevant standing committee for formal deliberation. The referral is automatic — it is a procedural fait accompli, not a recommendation. The committee is now required to consider it.
What the tax is. The measure — confirmed by South Korea's Ministry of Economy and Finance as proceeding on schedule — imposes a combined 22% rate (20% national income tax plus 2% local surtax) on annual crypto gains exceeding 2.5 million won, approximately $1,810, according to the petition itself as cited by Bloomingbit. The first filing and payment period is set for May 2028, covering gains realized from January 1, 2027. South Korea's National Tax Service has already begun building the reporting infrastructure with domestic exchanges, per Coincub.
The petition's case. The core argument is structural unfairness: South Korea's equity markets remain effectively exempt from capital gains tax, yet crypto investors face immediate taxation above a low deduction floor. "While the stock market effectively remains under a tax-exempt system, virtual assets are immediately subject to taxation with a low deduction threshold of 2.5 million won ($1,810)," the petition states. Petitioners also warn of capital and talent flight: "If taxation is enforced in order to secure short-term tax revenues, it is likely to lead to greater losses in the long term, namely, a contraction of industry and an outflow of capital and talent abroad."
The petition targets younger investors specifically. South Korea's housing market has been broadly inaccessible to younger cohorts for years, and crypto has served as a primary speculative vehicle for that demographic. A 22% tax on gains above a low floor — without the exemptions stocks enjoy — is framed as a policy that forecloses one of the few remaining paths to wealth accumulation.
Market context. South Korea is not a peripheral crypto market. As of March 2025, approximately 32% of its population held cryptocurrency, according to Yonhap as cited by Cointelegraph. The scale of that participation makes the policy stakes unusually high by global standards. But the market has already been contracting: daily trading volumes across the five largest South Korean exchanges — Upbit, Bithumb, Coinone, Korbit, and Gopax — fell from $11.6 billion in December 2024 to $3 billion in February 2025, a decline of roughly 74%, per CoinGecko data cited by Cointelegraph. Tightening AML and KYC rules — including a proposed requirement to flag all crypto transactions above 10 million won (~$6,630) sent to or from foreign wallets — have compounded the pressure.
The precedent problem. The committee referral is meaningful but not decisive. In November 2024, a separate petition to abolish the same tax gathered more than 80,000 signatures and was also referred to a standing committee, per Bloomingbit. The outcome was a delay, not a repeal. The tax has been postponed multiple times since its original 2022 target date. Each round has followed the same arc: political pressure, committee review, postponement, rescheduled deadline.
This time, the People Power Party has filed legislation in the National Assembly to permanently remove the tax from the Income Tax Act entirely, per CoinMarketCap. Whether that bill or the committee review produces a repeal, another delay, or a modified threshold adjustment depends on the legislative arithmetic of a divided parliament. The Ministry of Economy and Finance has maintained that the January 2027 date is firm while political pressure has cycled through multiple prior iterations without producing a final legislative answer.
APAC implications. South Korea's resolution — repeal, delay, or modification — will function as a reference point for other Asia-Pacific jurisdictions currently designing or debating crypto tax regimes. A repeal would strengthen the case for light-touch treatment. A sustained enforcement would demonstrate that retail opposition, even at scale, does not automatically produce policy outcomes.
The committee has no statutory deadline to complete its review.