Cheongju’s New Initiative for Tax Collection
In a significant move aimed at enhancing tax collection, Cheongju, a city in South Korea, has established a trading account for virtual assets under the local government’s name. This new initiative will enable residents who owe taxes to convert their seized digital currencies into cash, addressing a growing problem of tax delinquency.
Background on Asset Seizures
Since the initiation of asset seizures in 2021, the city has confiscated virtual holdings from 203 individuals who were unable to pay their local taxes. However, the local government’s revenue from these assets has been minimal, primarily due to challenges in liquidating them.
Facilitating Asset Sales
To facilitate the sale of these assets, the city plans to take control of virtual currencies if payment of owed taxes is not made. The seized assets, totaling around 1.5 billion Korean won, are tied to debts from 161 taxpayers.
Concerns and Recommendations
Cheongju officials are concerned about the volatility often associated with cryptocurrencies. Thus, they are advocating for taxpayers to voluntarily sell their digital holdings to settle their debts before initiating any forced sales. A city representative emphasized the importance of these measures, stating:
“The government will work diligently to ensure that virtual assets do not serve as tools for avoiding taxes in the future.”
