The government of Japan is ready to reduce the 30% tax imposed on cryptocurrency exchanges in the region.
This consideration was influenced by the latest push of the Japanese government to boost growth in its domestic finance and technology sectors. Generally, it seems Japan is building its interest in domestic crypto and the Web3.0 ecosystem.
Presently, the Liberal Democratic Party which is the ruling political party in Japan has approved a proposal that excuses crypto companies from paying taxes on unrealized capital gains. This is especially for tokens that they have either issued or held. The new tax rule will be moved over to the Japanese Parliament in January 2023 before implementation at the beginning of Japan’s next fiscal year April 1st.
Akihisa Shiozaki, an LDP lawmaker and member of its Web3.0 policy office told Bloomberg that “this is a very big step forward,” adding that “It will become easier for various companies to do business that involves issuing tokens.”
Digitization Surges in Japan
Japan currently imposes a 30% corporate tax on crypto firms that hold cryptocurrencies even if they don’t earn profit from the sales of digital assets. This unprofitable rule has caused many local crypto exchanges to set up shops in other regions over the years.
However, Japan’s financial authority suggested that the corporate tax regulation should be relaxed in consonance with Prime Minister Fumio Kishida’s New Capitalism initiative to revive the economy. In that same proposal, the regulator talked about lowering fees for individual stock investors.
Equally, the Japanese digitization space has experienced a series of expansions with the most recent inclusion of metaverse and Non-fungible tokens (NFTs) for local authorities using digital solutions. It is all aimed at assisting local authorities to resolve challenges using digital technology no matter where they are located. The digitization move in Japan is spreading like wildfire as the country is also looking at digitizing national identity cards.
Japan’s Virtual and Crypto assets Exchange Association (JVCEA), a self-regulatory agency that oversees the operations of local digital assets service providers in Japan intends to relax its screening process for the listing of tokens.