Leader of Japan’s Democratic Party for the People (DPP), Yuichiro Tamaki, has proposed a new tax policy. The proposed policy would lower the tax on cryptocurrency gains to 20% if he is elected. Tamaki’s plan aims to treat crypto profits similarly to gains from the stock market.
In a post on X on 20 October 2024, Tamaki urged voters to support his party if they favor a more favorable tax regime for cryptocurrency.
“If you think crypto assets should be taxed separately at 20% instead of being treated as miscellaneous income, please vote for the Democratic Party for the People,” Tamaki said in the translated message.
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DDP Holds Just Seven Seats
However, the plan faces challenges as the DPP currently holds just seven out of 465 seats in Japan’s House of Representatives, the lower house of the National Diet of Japan. This makes it unlikely that Tamaki’s proposal will gain immediate traction.
Under Tamaki’s proposal, exchanging one cryptocurrency for another would not trigger a taxable event, which could provide significant relief to crypto traders.
This approach contrasts with the current system. Now the crypto profits are classified as miscellaneous income, subject to tax rates ranging from 15% to 55%, depending on individual income levels.
“We want to make Japan a strong nation in the Web3 business,” Tamaki said, emphasizing that his party’s goal is to position Japan as a leader in the emerging Web3 space. He added that the DPP may also consider tax cuts on other financial income in the future.
【拡散希望】
暗号資産に関して明確な減税&規制改革を打ち出しているのが国民民主党です。暗号資産を雑所得ではなく分離課税20%にすべきと考える人は国民民主党に入れてください。暗号資産同士の交換時には税金をかけません。
こうした国民民主党の公約を拡散していただければ幸いです。… pic.twitter.com/hpbX966yTJ
— 玉木雄一郎(国民民主党代表) (@tamakiyuichiro) October 20, 2024
Japan’s national election is scheduled for 27 October 2024. The DPP’s campaign centers on increasing take-home pay to combat inflation. Tamaki’s crypto tax plan is part of a broader strategy to attract tech-savvy voters and entrepreneurs.
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Japan’s Crypto Holders Face Up To 55% Tax Rates
Currently, Japanese crypto holders face steep tax rates, with individuals earning more than 40 million yen ($268,000) paying up to 55% on their crypto profits.
Corporate crypto holders also face a flat 30% tax on their holdings at the end of the financial year, regardless of whether they have sold any assets for profit.
Last month, Japan’s Financial Services Agency (FSA), the nation’s financial regulator, proposed a flat 20% tax rate on crypto gains, aligning them with traditional financial assets like stocks.
The proposal came as part of the FSA’s tax reform request submitted on August 30. It aims to simplify the treatment of cryptocurrency investments by categorizing them similarly to traditional financial (TradFi) assets.
Japan’s crypto industry has long advocated for reforms to reduce the tax burden on digital assets.
In 2023, the Japan Blockchain Association (JBA) pushed for a flat 20% tax rate and a loss carryover provision to stimulate growth in the sector. However, previous efforts have not led to significant policy changes.
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