Japan’s DPP Leader Proposes Crypto Tax Review, Pushes Web3 & NFT Growth

Yuichiro Tamaki, leader of Japan’s Democratic People’s Party (DPP), has proposed crypto tax reform to support the growth of a token economy, including Web3 and NFT if he wins the election.

His plan would reduce taxes on crypto earnings to a separate filing tax of 20% instead of treating them as miscellaneous income.

Proposal for the reduction of taxes on cryptography

According to the campaign document, Tamaki suggested allowing losses to be carried forward for three years and exempting from taxes the exchange of one crypto asset for another.

Other proposals include increasing leverage limits from 2x to 10x and introducing crypto exchange-traded funds (ETFs). The reform plan also addresses monetary innovation at the regional level. This involves digitizing the yen and empowering local governments to create their own digital currencies. The ultimate goal is to boost regional economies. These steps could steer Japan toward a more modern financial system.

Currently, crypto investors are taxed up to 55% in the miscellaneous income category. A 20% tax on crypto earnings would therefore match the current tax rate on stock market earnings, essentially creating parity between digital assets and traditional financial investments.

Meanwhile, Tamaki noted that the DPP may explore tax reductions on other financial gains in the future, but for now, the focus remains on establishing Japan as a leader in Web3. The translated X post from the DPP leader read:

“Anyway, for now, we want to make Japan a strong nation in the web3 business.”

Reevaluation of the cryptographic framework

CryptoPotato recently reported that Japan is looking to review the effectiveness of its crypto asset regulations in the coming months, which could open the door for crypto ETFs in the country.

The assessment will evaluate the current regulatory framework established under the Payment Services Act (PSA), which recognizes cryptocurrencies such as Bitcoin as legal property and requires cryptocurrency exchanges to comply with anti-money laundering (AML) rules. and counter-financing of terrorism (CFT). At the same time, the Financial Instruments and Exchange Act (FIEA) regulates crypto derivatives.

Japan’s Financial Services Agency (FSA) is primarily aiming to determine whether these regulations have effectively protected investors, given that most Japanese users treat crypto assets as investments rather than payment methods.

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