The revision of much-disputed taxes on stock trading income and property are expected to take an extended political turn, as indicated by grandstanding efforts of ruling and opposition party leaders to gain the upper hand on the divisive issue, market watchers said Wednesday.

The development is highly likely to push back the timing of taxation of cryptocurrencies scheduled to take effect in January next year. The government first introduced the tax in December 2020 to impose a 22 percent rate on annual gains of over 2.5 million won ($1,810) from cryptocurrency trading, only to be postponed twice.

The Financial Services Commission’s May data showed the number of digital coin investors stood at 6.45 million as of December last year. About 1.89 million were in the 30 to 39 age group and 1.86 million in the 40 to 49 age group. The number of retail stock investors is about 14 million. About 495,000 homeowners paid a combined 4.2 trillion won in property tax last year.

Experts say haphazard, voter-pandering promises of tax cuts can come at the expense of predictability and consistency in tax policy and fiscal soundness.

The grandstanding was initiated by ruling People Power Party floor leader Choo Kyung-ho. He said Tuesday a discussion should proceed on the revision of the two taxes, challenging the former chairman of the main opposition Democratic Party of Korea (DPK), Lee Jae-myung, to fulfill his earlier pledge to reconsider the issue.

Lee, a presidential hopeful seeking a reclaimed party leadership, acknowledged on July 10 that heavy taxes on homeowners with multiple properties have fanned unnecessary conflict and opposition.

The enforcement of stock trading income tax next January, he added, “should come under consideration.” It was a significant change in tone from the previous party platform spearheaded to justify the capital gains tax “for fair taxation.”

Korea is set to impose a tax of up to 27.5 percent on income from trading stocks, funds, bonds and financial derivatives exceeding 50 million won. 

However, institutions and foreign investors are exempt from the heavy tax. This is a source of heated criticism from retail investors compounded further by elevated risks of scalping, among other regressive financial practices.

Choo said the PPP prioritizes the public’s livelihood, a concern he said should be equally of interest to the main opposition and therefore hard to dismiss. 

The ruling party advocates for a tax cut for homeowners with multiple properties and an outright scrapping of the stock trading income tax.

“We suggest the main opposition immediately undertake efforts to discuss the tax revisions proposed by Lee earlier,” Choo said at a party strategy meeting at the National Assembly. “The public is confused due to differing opinions of the main opposition lawmakers. It is time for a serious discussion.” 

The open challenge only exacerbated the incoherence within the main opposition, as illustrated by the DPK policy committee chair, Rep. Jin Sung-joon, opting for a reservation.

“We will fine-tune party stance soon after the announcement of government tax reform late this month,” he said in a statement.

The party will, he said, consider participating in consultations of the government, ruling and opposition parties upon review of the specifics of 추천 revenue generation measures, despite their collective opposition against the government and ruling party railroading to benefit the rich.

The main opposition has yet to revise the party platform that could end up denouncing the botched policies under the previous Moon Jae-in administration.

Kim Du-kwan, a strong DPK chairman candidate trailing Lee in polls, said the former chair’s move was nothing short of upending the party’s principles on taxation amid deepening inequality and polarization.

Among critics of Lee in the minor opposition bloc is Cho Kuk, a disgraced former justice minister who heads the Rebuilding Korea Party, which secured 12 Assembly seats in the April 10 general elections.

“The financing conditions of municipal governments will take a direct hit if property taxes are scrapped,” he said Sunday on Facebook.