Last updated on November 11th, 2024 at 10:56 am
Yuichiro Tamaki, leader of Japan’s Democratic Party for the People (DPP), has proposed a new crypto tax plan to reduce the tax rate on cryptocurrency gains to 20%. Currently, crypto profits in Japan are taxed as miscellaneous income, with rates ranging from 15% to 55%, depending on personal income. Tamaki’s plan would align crypto taxes with the 20% tax rate applied to stock market gains. The proposal, announced before Japan’s national election, is part of the DPP’s broader platform to reform financial policies.
In an X post on October 20, Tamaki called for the voters to vote for DPP, arguing that crypto assets should be taxed at 20% class and repealing the miscellaneous income tax. The current tax law tries to slide all burden on high-income earners while taxing crypto gains up to 55% for individuals earning over 40 million JPY ($268,000).
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DPP’s Focus on Web3 and Future Tax Reforms
Another provision in Tamaki’s plan will remove tax events in exchanging one cryptocurrency for another and make the tax regime on cryptocurrencies for investors more straightforward. When replying to a user on X, Tamaki opined that the DPP will look at other types of financial income in the future to improve tax reductions. But for now, the party is looking to get Japan in a position to grow and advance the sector in the Web3 space.
Japan’s Financial Services Agency (FSA) recently outlined plans to overhaul the country’s tax code by 2025, including reductions in crypto taxes. Despite these efforts, Tamaki’s DPP currently holds only seven out of 465 seats in Japan’s House of Representatives, making it challenging to push these changes forward. Nevertheless, polls suggest that the DPP could increase its seats to as many as 20 in the upcoming election on October 27.
The DPP’s campaign centers on boosting take-home pay to combat inflation, while the Liberal Democratic Party and Komeito coalition are expected to retain a majority.
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