- Yuichiro Tamaki, leader of Japan’s Democratic Party for the People, has pledged to lower crypto taxes to 20% if elected.
- Tamaki’s plan also includes not taxing crypto-to-crypto transactions and aligning crypto taxes with stock trading taxes.
- The Democratic Party for the People currently holds only 7 out of 465 seats in Japan’s lower house of parliament, making Tamaki’s proposed tax cuts unlikely to pass if the party does not significantly increase its representation in the upcoming election.
Yuichiro Tamaki, head of the Democratic Party for the People in Japan, recently proposed lowering the tax rate on crypto gains to 20% if he gets elected. This would bring crypto taxes in line with stock market profits and help establish Japan as a leader in Web3 technology.
Current Crypto Tax Situation in Japan
In Japan, crypto profits are taxed as miscellaneous income at rates from 15% to 55% based on total earnings. By comparison, stock market profits have a maximum 20% tax rate.
Corporations also face a flat 30% tax on crypto holdings at the end of each fiscal year, even if no profits were realized.
Tamaki’s Proposed 20% Crypto Tax Plan
Tamaki stated in a social media post that the Democratic Party for the People would lower crypto taxes to 20% if elected. This would align crypto taxes with stock market profits.
Exchanging one crypto for another would not trigger a taxable event under his proposal. Tamaki wants Japan to become a global leader in the Web3 industry with this tax cut.
Election Outlook and Viability
Japan’s general election takes place on October 27. The Democratic Party for the People currently holds just 7 of 465 seats in Japan’s House of Representatives, so passing this policy could be difficult.
However, public opinion polling suggests the party could increase its seats to around 20 after the upcoming election. This would still be a minority, but demonstrates growing support.
The broader election is expected to be won by Japan’s ruling Liberal Democratic Party and its coalition partner Komeito. They will likely retain a majority government.
Conclusion
While the Democratic Party for the People faces long odds to pass a crypto tax cut, its proposal shows the growing prominence of digital assets in Japan’s political discourse. The next government may face increasing public pressure to foster crypto innovation through competitive tax policies.
