With the aim of attracting new start-ups with blockchain technology and other inventions, South Korea is willing to take measures like lowering its taxes. The country’s purpose is to reduce taxes and ensure technological improvements in the country. South Korea is currently ranked at the third position in the use of cryptocurrencies. Its citizens have become so attached to the new mobile-based marketing app with the aim of making more profits that they forget about the warnings their government is issuing.
It’s on July 18th, last Wednesday when the Korean government made the momentous announcement. This is after the government agencies and ministers made the decision. This is per the report by the CoinDesk Korea that stated that the organizations which collaborate with the new technology innovations would be exempted from paying of taxes.
Besides, the ministers went ahead to make propositions involving the decrease of onset level when selecting the firms to have their taxes reduced. They saw that small firms and those that have recently been started have challenges when they start taking part in the market. Even more, they said that they find it hard to start and work as per the tax rules that also apply to other larger and well-grounded institutions. This plan will have advantages for South Koreans after they Buy Bitcoin since it will mean more profits for the business people and will be assured of secure trading experience.
Currently, information about the specific amount of tax to be deducted from the companies has not yet been given. It is in 2019 that this suggestion made by government officials is expected to be executed when there will be more new regulations and the market will have matured even more.
Yonhap goes ahead to explain that the benefits will be experienced by all South Korean start-ups that will be collaborating with the blockchain technology. He also said that it’s not mandatory that the firms be from South Korea but also other firms from different countries are also welcome.
Though this plan comes with many benefits, it has also drawbacks too. Though there will be profits for the business owners, more gains will be enjoyed by other crypto traders from other countries. It will also mean that foreign investors will not be in a position to trade cryptocurrencies through South Korean exchanges, and still, other nations will not have opportunities to access crypto assets that are offered by the Korean exchanges.
This will not be the first time when the government plans on reducing the taxes for those companies that work closely with the distributed ledger technology since there are also similar cases in Europe specifically Spain and Belarus.
In Spain, during the reign of Mariano Rajoy as president, the same proposal was made by the government that companies working with the blockchain technology should be exempted from paying taxes but regrettably, the plan did not succeed.
In Belarus, there was the creation of an exclusive zone for the firms working with the crypto and blockchain. This zone would enable them to pay fewer taxes, but at the end, the people working in the industrial park refrained from paying the taxes too making this plan fail also.
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