Japan Blockchain Association Requests Government to Revise Crypto Tax

In a bid to foster a more favorable environment for the blockchain industry, the Japan Blockchain Association (JBA) has called upon the government to revise the country’s crypto tax system, stating that the existing framework is impeding the progress of Web 3.0 enterprises within Japan.

According to the announcement by the association, the current tax structure poses significant challenges to the growth and development of blockchain-based businesses in the nation. Meanwhile, the concerns raised by JBA revolve around the complexities and uncertainties surrounding the taxation of cryptocurrencies and blockchain-related activities.

JBA’s Specific Request

Also, the current system’s intricacies create obstacles for startups and established businesses alike, resulting in a disincentive for entrepreneurship and investment in the sector. As such, the association has requested that the government eliminate year-end unrealized gains taxation on tokens issued by third parties.

Furthermore, the Japan Blockchain Association has asked the government to change the taxation method for individual crypto asset transactions to separate taxation while setting a unified tax rate of 20%. Additionally, JBA requested that the government eliminates income tax on profits from each crypto asset exchange.

Benefits That Come With JBA’s Request

Notably, the removal of income tax on profits generated from crypto asset exchanges will enhance the functionality of Web 3.0 use cases such as Non-FungibleTokens (NFTs), and Decentralized Finance (DeFi) markets, resulting in improved convenience for crypto asset users.

By removing income tax, companies and organizations will no longer be compelled to sell their tokens for tax purposes, consequently reducing the obstacles to entering the Web3 market. Likewise, the elimination of tax will foster the growth of token-enabled economies and will also reduce tax burdens.

However, the success of the proposed revisions to the crypto tax system will depend on effective collaboration between the government, regulatory bodies, and industry stakeholders. Striking the right balance between fostering innovation and ensuring financial accountability will be crucial in shaping a thriving and sustainable blockchain ecosystem in Japan.

Japan’s Leadership in Web3 Adoption

Recently, Koichi Hagiuda, chairman of the Liberal Democratic Party’s Policy Research Council, emphasized Japan’s pioneering role in embracing the emerging technology of Web3. the chairman highlighted the importance of supporting Web3 startups in their early stages.

To empower such startups, the Ministry of Economy, Trade, and Industry initiated the “Start Next Innovator” project, which has sent around 1,000 entrepreneurs and students to Silicon Valley over the past five years.