Japanese Political Party Leader Pledges Cryptocurrency Tax Breaks If Elected
Date: 2024-10-21 Author: Oliver Abernathy Categories: IN WORLD
Japanese People’s Democrats Party leader Yuichiro Tamaki has proposed a plan to cut taxes on cryptocurrency income to 20% if he is elected. Tamaki made the announcement in a post on X (formerly Twitter) on October 20, emphasizing, “If you believe crypto assets should be taxed at 20% instead of as a one-time income, vote for the People’s Democrats.”
Putting this plan into practice may be a challenge, however, as Tamaki’s party currently holds only 7 of the 465 seats in Japan’s lower house of parliament, known as the House of Representatives.
Tamaki's proposal would tax cryptocurrency income at 20%, which is in line with taxes on stock profits. In addition, under this plan, exchanging one crypto asset for another would not be considered a taxable event. The party leader also called on his supporters to spread the word about the party's plans to support cryptocurrencies.
In response to a question from one of the X users, Tamaki noted that his party would consider reducing taxes on other types of financial income in the future, but for now, the main priority is the development of the Web3 sphere and strengthening Japan's position in this industry: "We are striving to make Japan a strong country in Web3 business."
Elections in Japan will be held on October 27, and the main thesis of the People's Democrats party's election campaign is to increase real incomes of the population in the fight against inflation.
In August 2023, the Financial Services Agency of Japan presented a plan for a large-scale tax reform for 2025, which includes reducing taxes on crypto assets. Currently, cryptocurrency income in Japan is taxed as a one-time income at rates ranging from 15% to 55%, depending on the overall income level.
The maximum tax rate of 55% applies to individuals with incomes over 40 million yen (about $268,000).
In comparison, profits from stock trading are taxed at a maximum rate of 20%. In addition, legal entities holding cryptocurrencies are required to pay a flat 30% tax on their assets at the end of the fiscal year, even if they have not made a profit from the sale.
Despite the significance of Tamaki’s proposals, the People’s Democrats’ chances of winning the election remain slim. According to polls conducted by local news agency Mainichi, a coalition of the Liberal Democratic Party and the Komeito Party is likely to retain a majority in the Diet. However, forecasts also indicate that the People’s Democrats could increase their representation in the Diet from 7 to 20 seats.
In comparison, profits from stock trading are taxed at a maximum rate of 20%. In addition, legal entities holding cryptocurrencies are required to pay a flat 30% tax on their assets at the end of the fiscal year, even if they have not made a profit from the sale.
Despite the significance of Tamaki’s proposals, the People’s Democrats’ chances of winning the election remain slim. According to polls conducted by local news agency Mainichi, a coalition of the Liberal Democratic Party and the Komeito Party is likely to retain a majority in the Diet. However, forecasts also indicate that the People’s Democrats could increase their representation in the Diet from 7 to 20 seats.
