South Korea is constantly exploring new options when it comes to expanding the country’s tax base. Various proposals had thus been brought forward in order to bolster the nation’s ability to successfully seize the cryptocurrency assets from those individuals who have not been paying taxes. Now, it looks as if the government has come up with ways of obtaining the crypto directly from the tax evaders’ wallets.
As the crypto industry increases in popularity seemingly every day, regulators from all over the world are concerned about how the new digital assets are being utilized in a way to avoid paying taxes, in addition to being involved in other undesirable aspects such as money laundering and even terrorist financing.
Crypto can now be seized directly from the wallets
Tax codes need to be thoroughly revised, according to the country’s legislators. This needs to be done so that the appropriate tax authorities can adequately confiscate the cryptocurrency assets from anyone who is discovered to have been avoiding paying mandatory taxes. The interesting (and some would say rather worrying) aspect of all this is that the government is reportedly developing new ways of accessing the crypto directly from the wallets themselves, which has led some to question the security of the wallets and the extent to which the government’s reach truly lies.
These new rules are all part of proposals that constitute a much bigger and annual review regarding South Korea’s tax system. In 2021, an increase in welfare costs pertaining to sustaining the country’s elderly population had culminated in legislators actively searching for ways to amend the existing tax codes, of which there are 16 in total. The revisions shall reportedly involve redistributive techniques and measures that will be implemented in an attempt to charge even higher taxes for wealthy conglomerates as well as individuals. Additionally, crack-down efforts will be intensified in order to put an end to tax evasion and money laundering, specifically in areas involving digital assets.
It should also be mentioned that while the authorities have long since been able to seize crypto from various centralized exchanges, the planned revision will also greatly expand the government’s powers via the extension of accessing crypto from users’ wallets.
Special attention is given to taxation
A decline of $1.3 billion in overall tax revenue is expected to occur due to the abovementioned revisions. This is because of the government’s decision to have tax breaks for the purposes of improving development and research regarding semiconductors, vaccines, and also batteries.
Furthermore, the tax incentives may be administered for companies and firms who are looking to fill vacancies and hire outside of Seoul, the nation’s capital, in addition to anyone who may want to restore production capacities.