Virtual asset tax set for 2-year delay as ruling, opposition parties launch W821tr budget battle

The Democratic Party of Korea is moving toward a two-year additional delay of the virtual asset tax, which had been set to take effect in January. The ruling and opposition parties have launched a full-scale budget battle over the government's 821 trillion won ($612 billion) spending plan for next year, following President Lee Jae Myung's policy address to the National Assembly.

Oh Ki-hyung, a Democratic Party lawmaker who leads the party's side on the National Assembly's Finance and Economy Committee, told reporters Tuesday after a party-government consultative meeting with the Ministry of Planning and Budget that there was a majority view within the committee that the virtual asset tax "inevitably needs additional preparation time before taking effect, given various external policy conditions." Oh said the committee would convey that position to the party leadership.

Democratic Party members of the finance committee had held a meeting with party leadership, the policy committee and the government on Wednesday, followed by a separate session with domestic virtual asset exchanges on Friday, gathering a wide range of views from inside and outside political circles. Those consultations are seen as having shaped the majority consensus Tuesday in favor of delaying implementation.

A two-year deferral is the leading option under discussion. Oh said most committee members "seem to be talking about around two years," adding that discussions so far had focused only on the delay itself and that the committee would examine the idea further.

Oh cited the Crypto-Asset Reporting Framework and related international tax information exchanges as another consideration, noting that full implementation of those mechanisms was not expected until 2029 and that leveraging them would make the tax more effective. Oh also said a basic digital assets act could be institutionalized as early as the first half of next year, and that if such a law were introduced, changes to the tax framework would need to be considered as well.

The Democratic Party is expected to discuss amendments to the income tax act and related legislation through the finance committee's tax subcommittee, while conducting additional consultations at the party leadership and policy committee level, before deciding whether to delay the tax and when to implement it.

Democratic Party members of the finance committee also met Tuesday with Minister Park and other government officials at the party-government consultative meeting to discuss major issues related to next year's budget, including the 162 trillion won Future Response Fund.

The ruling party has also begun its formal review of next year's budget proposal. Democratic Party members of the National Assembly's Budget and Accounts Committee held a workshop Tuesday to discuss priority spending increases and the overall direction of the budget review.

Lee Ki-heon, a Democratic Party lawmaker on the budget committee, said on KBS Radio that "the core of next year's budget is addressing unbalanced growth," adding that while macroeconomic indicators had improved, the budget must help ordinary people, the self-employed and small business owners who still feel left behind, while laying the groundwork for the future.

People Power Party leader Jang Dong-hyeok struck back at a National Assembly press conference Tuesday, calling for the full 104.4 trillion won in surplus funds from the Future Response Fund to be used to retire government bonds, while presenting his own "budget to solve the people's lives."

Jang unveiled proposed spending increases across the party's five core budget priorities — youth livelihoods, public safety, people's livelihoods, jobs and relief from everyday hardships — saying the plan was "not flashy slogans but a budget that actually solves the problems in people's lives." He also said the party would push for half-price tuition at private universities, with international students excluded from the benefit.