The two prominent crypto advocacy groups in Japan have called for reduced taxes on individual investors. The Japan Crypto-Asset Business Association (JCBA) and the Japan Crypto-Asset Exchange Association (JVCEA) have released a request for the reformation of taxes for cryptocurrency investments in the country. The request highlights issues that obstruct cryptocurrency adoption in the island nation.
What does the crypto reform request contain?
The request highlights the necessity of making tax reporting easier. Moreover, the groups also point at the system’s lack of uniformity. Additionally, they also make comparisons to other countries’ tax regimes on digital assets. And most importantly, they call attention to the significance of crypto assets to Japan’s web3 goal.
In addition, Chairman of the Tax System Study Group, Goku Saito stated,
“If the Japanese government makes Web 3.0 a national strategy, the frequency with which the public will come into contact with crypto-assets will inevitably increase dramatically… making it easier to hold will lead to the spread of Web 3.0 and contribute to the development of the market.”
Moreover, the request calls for a reduction in taxes for individual investors. The two groups propose a separate 20% tax for individual investors. The tax reform request includes provisions to carry losses forward for three years starting from the subsequent year. Crypto investors in Japan currently face taxes up to 55%. If approved, the reform would provide much-needed relief to the Japanese cryptocurrency community.
Furthermore, the reform request comes on the heels of an internal memo reportedly to be submitted to Japan’s Financial Services Agency (FSA).
In addition, crypto taxation has been a hot topic among several governmental bodies. Indian crypto investors were disheartened by the heavy 30% tax burden. On the other hand, South Korea decided to postpone its taxation initiatives to 2025. The move was in hopes of letting the industry breathe and regain some traction after the recent market bloodbath.
Japanese crypto lobbyists have been hard at work trying to bring attention to the high tax regime in Japan. They believe high taxes would get in the way of an emerging industry which has a lot to offer the island nation.