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Yuichiro Tamaki, the leader of Japan’s Democratic Party for the People (DPFP), is working to win over voters ahead of the national elections on October 27. He is proposing crypto tax cuts and changes to cryptocurrency regulations.
On October 20, Tamaki shared on X that if people want crypto assets to be taxed at a separate rate of 20% rather than as miscellaneous income, they should vote for his party. He also promised there would be no taxes when swapping one cryptocurrency for another.
The DPFP, which has seven seats in the House of Representatives, is pushing for the introduction of crypto exchange-traded funds, converting the yen to digital currency, and encouraging local governments to create digital currencies to support local economies.
【拡散希望】
暗号資産に関して明確な減税&規制改革を打ち出しているのが国民民主党です。暗号資産を雑所得ではなく分離課税20%にすべきと考える人は国民民主党に入れてください。暗号資産同士の交換時には税金をかけません。
こうした国民民主党の公約を拡散していただければ幸いです。… pic.twitter.com/hpbX966yTJ
— 玉木雄一郎（国民民主党代表） (@tamakiyuichiro) October 20, 2024
Criticism From Investors About The Crypto Tax
Japan’s crypto tax system has been a major headache for investors. Currently, profits from cryptocurrencies are taxed like regular income. This means that if someone makes over 40 million yen (about $265,000), they could face a tax rate as high as 45%. In comparison, profits from selling stocks are taxed at a much lower flat rate of 20%.
Tamaki isn’t alone in calling for change. For the last two years, Japan has been looking into its crypto tax rules. Last year, the government decided that crypto holders wouldn’t be taxed on unrealized gains. Recently, the Financial Services Agency suggested that crypto assets might be treated as financial assets in the future.
This Sunday’s general election is crucial for Shigeru Ishiba, who became Japan’s prime minister in September. As the leader of the Liberal Democratic Party, Ishiba is working to strengthen his position after facing a scandal related to party campaign funds. His predecessor, Fumio Kishida, had been a strong advocate for web3, referring to it as a “new form of capitalism.”
Liberal Democratic Party Released a Web3 White Paper
In April, Japan’s Liberal Democratic Party published a white paper on its plans for web3 and blockchain technology. Masaaki Taira, who led the party’s web3 team and is now the Minister for Digital Transformation, is pushing for changes to the crypto tax system. He believes that developing web3 games could help boost Japan’s gaming industry.
At the same time, the Constitutional Democratic Party, Japan’s second-largest party, is also looking to revise the crypto tax rules. They think these changes are important for the country’s web3 growth. They aim to establish a legal framework for Decentralized Autonomous Organizations (DAOs) to clarify member responsibilities. Additionally, they are interested in exploring central bank digital currencies (CBDCs) and current pilot projects, like those from the Bank of Japan, to expand payment options and reduce costs.
Japan Slow to Approve Crypto ETFs Due to Regulations
Japan’s regulators are hesitant to approve cryptocurrency-based exchange-traded funds (ETFs), even though global markets are moving forward with spot crypto ETFs. Despite increasing pressure from local advocacy groups and new partnerships aimed at launching digital asset products, Japan’s tax policies and regulations still pose significant obstacles.
Mario Nawfal, entrepreneur and host of “The Roundtable Show” on X, described Japan’s stance on crypto ETFs as “still in HODL mode.” Meanwhile, the United States and Hong Kong have already greenlighted spot Bitcoin and Ether ETFs, signalling a growing openness to blending crypto with traditional finance.
This shift is clear, especially with both institutional and retail investors buying into new crypto ETF products. For example, on Oct. 22, investors put $329 million into BlackRock’s iShares Bitcoin Trust.
As Japan’s elections approach, the country’s crypto tax system remains a key issue. Yuichiro Tamaki, leader of the Democratic Party for the People, appeals to voters by promising a 20% tax rate on crypto assets rather than treating them as miscellaneous income. He also proposes eliminating taxes when exchanging one cryptocurrency for another, aiming to ease the burden on investors.
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