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The South Korean government pledged its support for the blockchain industry in 2018 and it hasn’t fallen short of its pledge since then. South Korea’s government provided lots of supports for the blockchain industry last year, and this year it has made a new plan to bolster the adoption and growth of the blockchain industry. Some of the support provided in 2018 included the launch of a scheme to train young blockchain experts and the unveiling of a blockchain beef traceability project, etc.
Come February 2019, the South Korean Government is planning to include the blockchain industry in its Research and Development (R&D) tax relief. The new tax reform will allocate 30 to 40% of R&D expenses as tax deductible for small businesses. While a total of 20 to 30% of R&D expenses would be allocated as tax deductible for large and medium businesses. This is a huge lift from the current taxation system which allocates 25% for small business and 0 to 2% and 8 to 15% for large and medium businesses respectively. This would greatly influence the growth in the industry and attract more blockchain startups in the country.
This gesture shows that South Korean government has awakened to the knowledge that the growth of the blockchain industry in any country holds a significant share in the country’s economy which ultimately cause a tremendous growth in all sectors of the nation.
Besides the blockchain industry, the South Korean government has also listed 15 fields including wearable robots and fine dust reduction technology to its 2019 R&D tax relief. This will help bolster the growth of the country through the growth of the individual industries. In a related report from December 2018, the South Korean government revealed its plans to build a blockchain virtual power plant. This power plant is proposed to serve the blockchain industry by drawing power from several sources.
Taking blockchain to the national level is a huge mileage that most countries have yet to achieve. Having government support will help alleviate the skepticism surrounding the blockchain industry and attract more investors, blockchain-based startups, and experts into the space. This relationship is more of symbiotic than parasitic as the growth of the industry will directly cause a noticeable amount of growth in the country.
As we look forward to this reform being implemented in February, we hope the government of other countries would borrow a leaf from the South Korean government and ‘invest’ in the global blockchain ecosystem.