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With Japan's election nearing, Democratic Party for the People leader Yuichiro Tamaki has put forward a proposal to lower crypto taxes to 20%. This move aims to streamline crypto gains taxation and position Japan as a global leader in Web3 innovation.
Tamaki’s Bold Proposal for Crypto Tax Reform
If elected, Yuichiro Tamaki, head of Japan's Democratic Party for the People (DPP), has suggested a crypto tax plan that would reduce the tax rate on crypto earnings to 20%.
"If you think crypto assets should be taxed separately at 20% instead of treated as miscellaneous income, please vote for the Democratic Party for the People," Tamaki pleaded in a posted translation from X on October 20.
DPP Faces Long Odds in Parliament
However, with only seven of the 465 seats held by Tamaki's DPP in Japan's chamber of Representatives (the lower chamber of the National Diet of Japan), the idea may not come to fulfillment for quite some time.
Crypto gains should be taxed at 20% to bring them in line with stock market profits.
According to Tamaki's proposal, trading cryptocurrency assets would not cause any tax events to occur.
"I would appreciate it if you could spread the word about these promises made by the Democratic Party for the People," Tamaki implored.
Japan’s Web3 Ambitions Take Center Stage
Tamaki told X user Shonai Dog that the DPP is now focused on establishing Japan as a leader in the Web3 space, but that they may explore cutting taxes on other forms of income in the future.
"We want to make Japan a strong nation in the Web3 business."
Crypto Tax Reform Amid Broader Election Issues
On October 27th, Japan will hold its election. Increasing take-home income to outpace inflation is central to the DPP's appeal to voters.
Plans to reduce taxes on crypto assets were part of a more extensive revamp of Japan's tax system for fiscal year 2025, which was announced on Aug. 30 by the country's Financial Services Agency.
Current Tax Rates for Crypto and Stocks
Depending on one's income level, crypto gains in Japan are now subject to a miscellaneous income tax rate of 15% to 55%, Coinelegraph notes.
If your annual income is over 40 million Japanese yen ($268,000), you could be subject to crypto taxes of up to 55%, says crypto tax firm KoinX.
The maximum tax rate for stock trading earnings, on the other hand, is 20%.
Corporate Tax Rules for Crypto Holdings
Even if a company doesn't make a profit from selling its cryptocurrency, its owners are still subject to a 30% tax rate after the fiscal year ends.
Election Outlook for the DPP
According to a recent poll by Mainichi, a local news organization in Japan, Tamaki's DPP is not very likely to win the next election.
It is anticipated that the Komeito coalition and the Liberal Democratic Party will maintain a majority, while the DPP's presence could rise from seven to twenty seats.
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