South Korean Lawmaker Targets 22% Crypto Tax as Capital Flight Looms

Park, a member of the People Power Party, characterized the tax as a punitive measure that treats digital assets more harshly than traditional financial products. During a recent broadcast on his YouTube channel, he pointed to the government’s decision to abolish the financial investment income tax on stocks, arguing that maintaining a separate, high-rate levy on crypto creates a "tax bomb" for digital asset holders. His primary concern is that the policy will trigger a mass exodus of Korean capital to foreign exchanges, further draining liquidity from local platforms.

Data from the Financial Services Commission suggests this trend is already underway. In the second half of 2025 alone, South Korean exchanges saw roughly 90 trillion won in crypto outflows. Park noted that between January and September of the previous year, 124 trillion won flowed into overseas exchanges, a figure he believes will balloon if the tax regime proceeds as planned. Beyond the headline rate, he criticized the lack of loss carryforward provisions, noting that the state intends to tax gains without offering relief when market volatility erodes investor portfolios. While the Ministry of Economy and Finance maintains that preparations for the 2027 rollout are on schedule, the proposal remains a point of intense political friction. With a public petition for repeal already surpassing 50,000 signatures, the National Assembly faces mounting pressure to amend the Income Tax Act before the new rules take effect.