Yuichiro Tamaki suggests a lower crypto tax rate, aiming to align crypto with stock profits and boost Japan’s Web3 sector.
Yuichiro Tamaki, leader of Japan’s Democratic Party for the People (DPP), suggested a new tax plan on October 20, 2024. This plan aims to reduce the tax rate on cryptocurrency gains to 20%. The proposed tax rate would apply to profits from crypto trading, aligning them with the tax rates applied to stock market profits. Tamaki shared the proposal on X (formerly Twitter). He encouraged voters to support the DPP if they believe crypto assets should be taxed separately at 20% rather than treated as miscellaneous income.
Still, the plan might encounter some serious difficulties on the way to becoming law. The DPP has only seven seats in Japan’s 465 Lower House seats, and it is improbable that the proposal will be materialised in the next election, which is scheduled for October 27, 2024.
Tamaki Proposes 20% Crypto Tax Rate to Boost Japan’s Web3 Ambitions
According to Tamaki, no tax would be paid when swapping one crypto asset for another, a situation that differs from the present tax laws. The Japanese tax system currently categorizes cryptocurrencies as miscellaneous income. Depending on the individual’s income, they attract a tax rate of 15-55%.
For those earning more than 40 million yen (approximately $268,000), the crypto tax rates can go as high as 55%. However, when it comes to stock trading, the taxes charged are flat at 20%. This makes the taxes on crypto much higher than those on stocks.
On its own, Tamaki’s DPP also voiced interest in more extensive financial changes. To a user on X, Tamaki said that the DPP might contemplate future tax reductions on other financial incomes. However, currently, it is focused on enhancing Japan in Web3. He said, “The strategy is to make Japan a powerful country in the Web3 business.”
This proposal comes amid debates about how Japan will tax cryptocurrencies. On August 30, 2024, Japan’s Financial Services Agency published its proposals for the fiscal year 2025 changes to the tax code, including possible cuts to crypto asset taxes.
Although the DPP plans to tax the use of cryptocurrency, opinion polls reveal its low popularity. According to a recent survey conducted by the Mainichi, the DPP has a very slim chance of clinching a majority in the election. The ruling party, LDP, and its coalition partner, Komeito, are expected to maintain their dominance in the Diet. However, the DPP may see a modest increase, gaining at most 20 additional seats.
