Japan’s Leading Party Pushes for Urgent Cryptocurrency Tax Reform
Leading Japanese ruling political party advocates the idea of a crypto-focused taxation policy.
In Japan, digital assets or say cryptocurrencies are treated favourably, and it’s considered under the Payment Services Act. Under the Payment Services Act, cryptocurrencies are defined as payment methods not tied to traditional currency and usable for transactions with unspecified recipients.
Despite the better level of crypto interest among the Japanese population, there is no crypto tax policy for crypto traders.
Under the existing laws, all crypto traders are required to pay crypto tax under the “other income” slab of the country’s tax rule.
This means that people who earn less might pay just 11% of their profits from trading cryptocurrency, but those with higher incomes could end up paying more than 50%.
To address the issues associated with the Crypto trading population & VCs interested in crypto project investment, Japan’s main party in charge, the Liberal Democratic Party, is urging the government to make quick changes to cryptocurrency taxes.
According to a statement from the party and a report from a Japanese news outlet called CoinPost, the party’s web3 project team shared a “White Paper” on April 12.
The team suggested that gains and losses from crypto transactions should be taxed separately, and individuals should report them themselves. Furthermore also suggested taking that proposal on a serious note.
It is worth it to note that, In February, the Japanese government unveiled plans to allow venture capital firms to invest in local crypto companies.
It seems that big players are now putting a type of indirect pressure on the ruling government to bring some crypto-friendly laws so that they can engage in this innovative sector at a better level.
Hong Kong, Japan, crypto
Notably, Hong Kong is also a popular destination for Japanese tourists. Both of these two jurisdictions have a better relationship in terms of many factors.
In mid-2023, Hong Kong legalized crypto trading under a new crypto regulatory framework. Also in the present time, the Hong Kong financial regulators are engaged in the Bitcoin spot ETF applications too.
Such a high level of inclination toward the Bitcoin & crypto sector by the Hong Kong government is surely going to put a big peer pressure on the Japanese government to adopt this innovative sector under proper rules & laws, as fast as they can.
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