Japanese Government to ease Crypto Tax on firms issuing tokens

Paigambar Mohan Raj
Source: TheNextWeb

Japan has one of the sturdiest tax laws regarding crypto. Currently, the island nation imposes around 30% tax on firms with unrealized gains on cryptocurrency holdings. However, this has changed as of yesterday. The Liberal Democratic Party approved a proposal exempting companies that issue cryptocurrencies from taxes on unrealized capital gains. The proposal applies to tokens issued and held by the firms.

The tax law shows that the government is carrying out previously declared ambitions to reduce the regulatory burdens on the crypto industry. The move is to promote innovation and investment. The choice was made despite the FTX collapse, which had a presence in Japan.

Will the new tax rules boost Japan’s crypto industry?

Speaking to Bloomberg, party member Akihisa Shiozaki said the proposal aims to enhance business conditions for firms issuing crypto tokens. The government of Prime Minister Fumio Kishida is expected to complete its yearly tax policy guidelines by the end of the year. However, changes to the tax laws are often given to parliament in January.

Moreover, Prime Minister Kishida has pushed for blockchain technology and digital banking. He has announced new investments in the metaverse and non-fungible token (NFT) industries. Under his “new capitalism” agenda, he mentioned crypto in initiatives to boost the economy.

In October, the JVCEA (Japan’s Virtual and Crypto assets Exchange Association) said that it would slack off on its scrutiny of crypto token listings.

Furthermore, on December 8, Sumitomo Mitsui Financial Group (SMBC) said that it is embarking on a project to check the applications of Soulbound tokens (SBTs). SBT is Vitalik Buterin’s proposal, co-founder of Ethereum, to utilize tokens to represent individuals’ digital identities.

With the initiatives mentioned above, it is clear that Japan is moving ahead with its web3 and crypto plans. If taxes are reduced, it may boost investor sentiment and consequently give a much-needed push to the emerging industry.