Yoon Raises Tax-Exempt Limit
Lee Introduces Investment Loss Carryforward Deduction
[Asia Economy Reporters Jeon Jinyoung and Park Juni] Lee Jae-myung, the presidential candidate of the Democratic Party of Korea, and Yoon Seok-youl, the candidate of the People Power Party, appear to be competing in virtual asset policy pledges. After Candidate Yoon raised the tax exemption limit, Candidate Lee accepted it and additionally proposed the introduction of loss carryforward deductions for investment losses. It is expected that the appeal to the 2030 swing voters will be strengthened. Both candidates also started canvassing local grassroots opinions in Seoul and Chungcheong, respectively.
On the 21st, Candidate Lee announced as his 51st ‘small but certain happiness’ pledge that he would raise the virtual asset taxation threshold to 50 million won and introduce loss carryforward deductions allowing investment losses to be carried forward for five years. The Democratic Party submitted a revision bill to the Income Tax Act containing these details the day before, supporting the legislation.
The 50 million won tax exemption limit for virtual assets was a pledge previously made by Candidate Yoon. Candidate Lee added the introduction of loss carryforward deductions to this. The intention is to tax considering the loss amount when there is a profit the following year after incurring losses from virtual asset investments. The maximum period for carrying forward losses is five years.
This is analyzed as a full-scale competition to preempt the virtual asset issue. Both candidates recently announced virtual asset pledges simultaneously to rally public opinion. Candidate Lee proposed virtual asset tax deferral, virtual asset legalization, review of permitting Initial Coin Offerings (ICO), and review of issuing and offering Security Token Offerings (STO). Candidate Yoon promised to raise the virtual asset tax threshold to 50 million won and enact a Digital Asset Basic Act. He also attended a ‘Virtual Asset Conference’ emphasizing the establishment of a ‘Digital Industry Promotion Agency (tentative name)’ and the transition to a negative regulation system.
The competition between the two candidates seems to stem from targeting the 2030 swing voters. The 2030 generation is a common weak support base for both candidates. Since the 2030 generation is the main investor group in virtual assets, this is interpreted as an intention to target them. Political commentator Lee Jong-hoon explained, "It is aimed at the MZ generation (Millennials + Generation Z), who are most likely to be the casting vote in a fierce contest," adding, "As the voting day approaches, candidates’ pledges tend to become similar to gain even one more vote." A People Power Party official said, "It is right to court the youth. More developed pledges related to virtual assets will come out in the future."
On the same day, the two candidates canvassed local votes by targeting Seoul and the ‘casting vote’ region of Chungcheong, respectively. Candidate Lee went on a tour of Seoul. He walked the streets of Yeonnam-dong and in the afternoon met with representatives of OTT companies TVING, Wavve, and Watcha to hear industry opinions. In the afternoon, he announced real estate pledges tailored to Seoul, including large-scale housing supply and deregulation of redevelopment and reconstruction.
Candidate Yoon conducted a one-night, two-day tour of Chungcheong. On the morning of the day, he visited the Yu Gwan-sun Memorial Hall in Cheonan, Chungnam, to pay respects. He plans to announce region-specific pledges related to improving east-west transportation networks and building administrative and industrial infrastructure.
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