South Korea: Blockchain companies protest government tax plans

The South Korean government recently decided to exempt the country’s crypto exchanges from the planned tax benefits for growth technologies. As expected, this decision is met with considerable resistance from the crypto scene based there. Three interest groups in the cryptosector have made a name for themselves.

In July, the South Korean government adopted a law that favors especially small and medium-sized enterprises, especially those dealing with so-called growth technologies. This is to promote innovation and technological innovation in the country.

However, the new rule does not apply to all new companies and start-ups without exception. For example, the Ministry for SMEs and Start-ups has compiled a list that defines sectors that are exempted from the tax benefits. In addition to the gaming industry and the entertainment industry also include Blockchain companies according to the plan of the Ministry. Among them, according to current reading, both crypto exchanges and blockchain start-ups.

Understandably, the classification did not fare well in the South Korean crypt industry. Not only does it negatively reflect the lack of tax advantages for crypto companies, which leads to economic disadvantage. Also, the classification by the Ministry in a rather dubious corner baffles the representatives of the industry sour.

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As the Korea Times reports, the largest advocacy groups in the South Korean cryptosector are now against the proposed regulation. The Korea Blockchain Association, the Korea Blockchain Industry Promotion Association and the Korea Blockchain Startup Association issued a joint press release.

“Trading in blockchain-based virtual currencies will soon be treated like gambling and alcohol. Should the National Assembly pass this law, a number of Blockchain companies would no longer be eligible for various tax benefits. This deters them from investment in research and development and leads to long-term emigration to other countries “,

it says in the press release. The Blockchain Company’s exemption from tax benefits is an expression of contempt and “daunting for the entire blockchain industry.”

Whether the proposal of the Ministry for SMEs and start-ups is really passed as planned now, will be decided in a few weeks. The legislature is examining the draft until 4 September. The local blockchain industry still has the opportunity to present their concerns. But time is short.

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