Yuichiro Tamaki, leader of Japan’s Democratic Party for the People (DPP), has proposed a tax reform plan aimed at reducing taxes on cryptocurrency gains to 20% if he is elected. The move is part of a broader strategy to position Japan as a global leader in the Web3 industry.
A Crypto-Friendly Tax Proposal
In a post on X (formerly Twitter) on Oct. 20, Tamaki called for a separate tax rate of 20% on crypto assets, aligning them with Japan’s stock market taxation. Under the current tax system, crypto profits are taxed as miscellaneous income, which can range from 15% to 55%, depending on personal income. By comparison, profits from stock trading are capped at 20%.
“If you believe that crypto assets should be taxed at 20% instead of being treated as miscellaneous income, vote for the Democratic Party for the People,” Tamaki stated in his X post.
DPP’s Limited Influence in Parliament
Despite the ambitious tax plan, the DPP holds only seven out of 465 seats in Japan’s House of Representatives, making it difficult to pass the proposal without gaining broader support. Nonetheless, Tamaki’s proposal could resonate with the growing number of crypto investors and businesses in Japan, potentially influencing future discussions around cryptocurrency taxation.
One key feature of Tamaki’s plan is that no tax would be triggered when exchanging one crypto asset for another, which could simplify tax obligations for traders and investors.
A Vision for Japan as a Web3 Leader
Tamaki emphasized that the DPP’s focus is on advancing Japan’s position as a Web3 hub. In response to a question on X, he also hinted that the party might explore additional tax cuts on financial income but stressed that their immediate goal is to promote growth in the Web3 sector.
“We want to make Japan a strong nation in the Web3 business,” Tamaki declared.
Japan’s national election is set for October 27, and the DPP’s platform centers on addressing inflation and boosting take-home pay. Tamaki’s crypto tax plan could appeal to younger, tech-savvy voters, especially as Japan aims to capitalize on the evolving digital economy.
Crypto Tax Landscape in Japan
Currently, cryptocurrency profits in Japan are subject to some of the highest taxes globally, with top earners paying up to 55% on their crypto gains if they make over 40 million yen ($268,000). Additionally, corporate holders of cryptocurrencies are taxed at a flat 30% rate on their holdings at the end of the financial year, regardless of whether they sell for a profit.
Japan’s Financial Services Agency has already indicated plans to overhaul the country’s tax code by 2025, with potential provisions for lowering taxes on crypto assets. However, Tamaki’s proposal seeks a more immediate change, bringing crypto taxes in line with stock market gains and reducing the burden on individual investors.
