Japan's Ruling Party Continues to Push Crypto Tax Reform Despite PM's Caution
Date: 2024-12-20 Author: Oliver Abernathy Categories: IN WORLD
Japan's ruling Liberal Democratic Party (LDP) continues to push ahead with crypto tax reform despite recent cautious statements from Prime Minister Shigeru Ishiba. According to Japanese publication CoinPost, the LDP's Digital Society Promotion Headquarters is set to unveil its plans to change the crypto tax system by the end of the year.
On December 18, the LDP's Digital Society Promotion Team met with the Financial Research Council to discuss "urgent proposals" to turn cryptocurrencies into "assets that contribute to the development of the Japanese economy."
Japan's Digital Minister Takuya Hirai said that priority will be given to developing a "master plan for tax reform" in the last days of 2024, which will serve as a basis for future changes.
CoinPost also noted that if the reform fails to be approved by the end of the year, implementing the changes in 2025 will be “extremely difficult.” In Japan, tax reform proposals are typically submitted at the end of the calendar year and then debated in the Diet the following year.
Takuya Hirai stressed the importance of completing the proposals in a timely manner given the upcoming Donald Trump administration in the United States in January 2025. He said it is important to take a clear stance on taxation, regulation, and cybersecurity before the new American president takes office.
Experts believe that Tokyo is keen to solidify changes to cryptocurrency policy, including tax reform and updated regulatory and cybersecurity requirements, before the new international environment begins to impact.
While Ishiba has previously appointed crypto reform advocates to key ministerial positions and mentioned blockchain in his election platform, his cabinet is not yet ready to commit to tax changes or the launch of a Bitcoin spot ETF in Japan.
Proponents of the reforms, both in the LDP and the opposition, argue that the current tax system is unfair to investors and encourages capital flight from the country. Unlike most countries, which impose a flat tax of around 20% on capital gains, Japanese investors are required to declare cryptocurrency income as “other income,” leading to rates of up to 55% for the wealthiest citizens.
According to the LDP’s Digital Society Headquarters, crypto tax reform is “urgent.” Hirai noted on his X page that the LDP is working on crypto legislation “faster than any other party in the world.”
On December 18, the LDP's Digital Society Promotion Team met with the Financial Research Council to discuss "urgent proposals" to turn cryptocurrencies into "assets that contribute to the development of the Japanese economy."
Japan's Digital Minister Takuya Hirai said that priority will be given to developing a "master plan for tax reform" in the last days of 2024, which will serve as a basis for future changes.
CoinPost also noted that if the reform fails to be approved by the end of the year, implementing the changes in 2025 will be “extremely difficult.” In Japan, tax reform proposals are typically submitted at the end of the calendar year and then debated in the Diet the following year.
Takuya Hirai stressed the importance of completing the proposals in a timely manner given the upcoming Donald Trump administration in the United States in January 2025. He said it is important to take a clear stance on taxation, regulation, and cybersecurity before the new American president takes office.
Experts believe that Tokyo is keen to solidify changes to cryptocurrency policy, including tax reform and updated regulatory and cybersecurity requirements, before the new international environment begins to impact.
While Ishiba has previously appointed crypto reform advocates to key ministerial positions and mentioned blockchain in his election platform, his cabinet is not yet ready to commit to tax changes or the launch of a Bitcoin spot ETF in Japan.
Proponents of the reforms, both in the LDP and the opposition, argue that the current tax system is unfair to investors and encourages capital flight from the country. Unlike most countries, which impose a flat tax of around 20% on capital gains, Japanese investors are required to declare cryptocurrency income as “other income,” leading to rates of up to 55% for the wealthiest citizens.
According to the LDP’s Digital Society Headquarters, crypto tax reform is “urgent.” Hirai noted on his X page that the LDP is working on crypto legislation “faster than any other party in the world.”
