Japan’s DPP Leader Proposes 20% Tax on Crypto Gains if

According to Cointelegraph: Yuichiro Tamaki, the leader of Japan’s Democratic Party for the People (DPP), has proposed a plan to lower the tax rate on cryptocurrency gains to 20%. He announced this proposal in an X post on October 20, urging voters to support the DPP in the upcoming election if they favour separate taxation for crypto assets. Currently, crypto profits are taxed as miscellaneous income between 15% and 55%, depending on personal income.The ProposalTamaki’s plan aims to simplify the tax treatment of crypto assets, aligning it with the tax structure for stock market profits, which are taxed at a flat rate of 20%. The plan also proposes no tax event when exchanging one crypto asset for another, offering significant tax relief for investors. This move is intended to position Japan as a leader in the Web3 space by creating a more favorable regulatory environment for crypto investments.DPP’s policy statement. Source: DPPPolitical Landscape and UncertaintyThe DPP currently holds only 7 out of 465 seats in Japan’s House of Representatives, making the likelihood of implementing this plan uncertain. However, recent opinion polls from local news outlet Mainichi suggest the party could increase its seats to as many as 20 in the upcoming election on October 27. The Liberal Democratic Party and its coalition partner Komeito are expected to retain a majority of the seats, potentially limiting the DPP’s ability to enact this policy.Tax Reform Efforts in JapanEarlier this year, Japan’s Financial Services Agency proposed a comprehensive overhaul of the country’s tax code, including lowering crypto asset taxes by fiscal year 2025. Corporate crypto holders in Japan face a flat 30% tax on their holdings at the end of the financial year, regardless of profit or loss.Future ImplicationsWhile the DPP’s chances of winning a majority in the election are slim, Tamaki’s crypto tax proposal has brought attention to the need for reform in Japan’s tax system for digital assets. The proposed reduction could make Japan more competitive in the global cryptocurrency market and encourage further innovation in the Web3 sector.

By Binance News