South Korea will look to tighten a crackdown on tax evasion by cryptocurrency investors and high-income earners as it seeks fresh revenue to cover rising welfare costs, its finance ministry said on Monday, according to a statement seen by Reuters.
The government proposes revising tax codes so that tax authorities will be able to seize crypto assets held by tax dodgers even if their cryptocurrencies are stored in digital wallets, starting next year.
Current regulations make it difficult for authorities to confiscate virtual assets held in digital wallets, although those accessible through exchanges can be seized to pay overdue taxes.
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.
The ministry will submit the tax review to parliament by Sept. 3 as the proposal needs approval from lawmakers to make it enforceable, the statement said.