Japan’s Prime Minister Shigeru Ishiba has pledged to incorporate tax cut proposals from the opposition Democratic Party for the People (DPP) into the government’s upcoming economic stimulus package. This initiative includes measures targeting gasoline and cryptocurrency taxes, as reported by Bloomberg on November 20.
Ishiba secured approval for the stimulus plan after committing to consider the DPP’s annual tax reform recommendations. These recommendations focus on income tax reform, corporate incentives, and temporary tax relief. Key measures include raising the tax-free income threshold from ¥1.03 million ($6,650) to ¥1.78 million ($11,435) for the first time in over 30 years and introducing a flat 20% tax rate on cryptocurrency profits like stock market taxes in the country. Currently, crypto gains in Japan are taxed as “miscellaneous income,” with rates reaching up to 55%, depending on individual income levels.
The DPP is also pushing for temporary sales tax cuts to 5% until wages rise by 2%, along with incentives for companies to increase salaries and invest in industries like semiconductors and artificial intelligence.
DPP senior official Makoto Hamaguchi underscored the party’s determination to raise the tax-free income threshold, labelling it a crucial reform overdue for decades.
“Japan’s tax-free income bar has not moved in the past 30 years, and we are determined to change that,”
Hamaguchi reportedly stated.
The stimulus package, including these proposals, is expected to be unveiled this week. Both ruling and opposition parties also agreed to finalize budget increases to support the package by the end of December.
Crypto tax reform has been a central theme for DPP leader Yuichiro Tamaki. He recently proposed eliminating taxes on crypto-to-crypto transactions to foster a Web3 economy focused on NFTs.
Tamaki’s broader vision includes increasing leverage ratios from 2x to 10x and introducing cryptocurrency ETFs. According to him, these reforms aim to modernize Japan’stax policies, boost its token economy, and provide financial relief to households.
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