Korean Government Wants Ability to Seize and Sell Cryptocurrencies of Delinquent Taxpayers
South Korea’s finance ministry announced the 2021 Tax Law Amendment Bill Monday, which is part of the government’s annual review of its tax system.
The bill includes a proposal to empower the country’s tax authority, the National Tax Service (NTS), to seize and sell cryptocurrencies belonging to tax delinquents starting Jan. 1, 2022, the Korea Times reported.
The government explained that the number of cases where tax delinquents use cryptocurrencies to hide their assets is increasing. The bill aims to crack down on tax evasion by crypto owners.
Under the proposed law, crypto exchanges must cooperate with the authorities and will be required to transfer cryptocurrencies to the government immediately upon request.
In case of non-compliance, properties may be searched and assets may be confiscated as deemed necessary by the authorities. The proceeds from the sale of seized crypto assets will go into the state coffer.
Korean lawmakers have voiced concerns that current regulations make it difficult to confiscate crypto assets which must be done under the existing bond seizure regulations. Not only can the process be disputed but a court-granted change in ownership records also cannot be applied to crypto assets that lack physical presence, the publication conveyed.
A ministry official was quoted as saying:
Property seizure procedures cannot be applied when the assets to be claimed by the government are kept in electronic wallets. The revision will allow direct seizing without court-approved change in ownership records. Assets held by tax dodgers in the form of digital coins will no longer evade seizure and forfeiture.
“Going after tax evaders is part of South Korea’s broader probe to tighten oversight of crypto markets to root out money laundering and other financial crimes using cryptocurrencies, as President Moon Jae-in looks to expand the tax base to fund increased welfare spending,” Reuters described.
The finance ministry said it will submit the revisions made to the 16 tax codes by Sept. 3. The proposal needs approval from lawmakers to make it enforceable.