Yuichiro Tamaki, leader of Japan’s opposition Democratic Party for the People (DPP), has made a strong push for crypto tax reform in the lead-up to the country’s October 27 election.
In an X post on October 20, Tamaki urged voters to support his party’s platform, which calls for clearer regulations and significant tax cuts for digital assets.
“If you believe that crypto assets should be taxed at a separate rate of 20% rather than classified as miscellaneous income, please consider voting for the Democratic Party for the People,”
he wrote to his followers in the post.
One of Tamaki’s key proposals includes abolishing taxes on crypto-to-crypto transactions, which he believes will support a burgeoning token economy centred around Web3 and NFTs. His broader plan, titled “Supporting the Token Economy Using Crypto Assets,” also suggests raising the leverage ratio from 2x to 10x and introducing cryptocurrency ETFs to the Japanese market.
Tamaki has long been an advocate for changes to Japan’s cryptocurrency tax structure. Last year, he pushed for a 20% flat tax rate on crypto assets, warning that without reform, Japan could lose talent and businesses to more crypto-friendly countries.
Currently, crypto profits are taxed as miscellaneous income in Japan, with rates ranging from 15% to 55% based on individual income levels. High earners, making over ¥40 million (about $268,000), can face the top tax rate of 55%, a major concern for those in the crypto space. Corporate cryptocurrency holders are also taxed at a flat rate of 30% on their holdings, even if no profits have been realized through sales.
In addition to Tamaki, other Japanese politicians, such as Shun Otokita of the Japan Innovation Party, have voiced concerns over the country’s crypto tax policies. Private sector organizations have similarly pressed the government for reform to create a more competitive environment for crypto investors and businesses.
Japan’s Financial Services Agency (FSA) is also eyeing tax reform, with plans for a comprehensive overhaul of the crypto tax code by fiscal year 2025. These changes could reduce the tax burden on digital assets and address issues surrounding customer protection, particularly amid rising fraud and illegal fund transfers linked to cryptocurrencies.
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