A South Korean province has adopted an advanced system to combat crypto tax evasion, successfully recovering $4.6 million in unpaid taxes from delinquents.
As per Feb. 22 local reports, the Gyeonggi province’s method represents a considerable shift from the traditional, labor-intensive process that previously took up to six months to identify and seize crypto assets from tax evaders. With the implementation of a new electronic management system, this duration has been drastically reduced to just 15 days.
The system operates by entering delinquent taxpayers’ information and utilizing resident registration numbers to trace their mobile phone numbers, which in turn helps locate individuals registered on cryptocurrency exchanges.
The process has already uncovered 5,910 tax evaders with crypto assets, leading to the collection of $4.6 million from over 2,300 individuals in a year.
Noh Seung-ho, the head of the Provincial Tax Justice Department, emphasized the province’s commitment to fair taxation. “We will continue to aggressively pursue dishonest delinquents who claim they have no money to pay taxes while dealing in virtual assets,” he stated, highlighting the efforts to protect honest taxpayers.
Gyeonggi province is also intensifying its efforts to combat tax evasion by bolstering collaboration with cryptocurrency exchanges and contemplating administrative measures against those who defy data requests, utilizing the authority of the local government.
The backdrop to these efforts is the upcoming general election in South Korea, where both the governing and opposition parties are advocating pro-crypto policies. This political stance is particularly relevant in a country known for its vibrant crypto trading scene.
South Korea’s ruling People Power Party, for example, has pledged to explore the feasibility of spot Bitcoin ETFs and proposed postponing the introduction of taxes on cryptocurrency profits, potentially delaying it until 2027. The move follows a previous delay from 2023 to 2025, indicating a cautious approach towards regulating the burgeoning digital asset market.
These developments reflect South Korea’s proactive stance on integrating cryptocurrency into its financial system while ensuring compliance with tax laws.
