Japan’s Liberal Democratic Party (LDP) is ramping up efforts to reform cryptocurrency taxation despite recent cautious remarks from Prime Minister Shigeru Ishiba.
Plans for Crypto Tax Reform by Year-End
According to a report by CoinPost, the LDP’s Headquarters for the Promotion of a Digital Society aims to finalize its cryptocurrency tax reform strategy before the end of 2024. On December 18, this team met with the Financial Research Council to discuss proposals for transforming cryptocurrency into an asset class that contributes to the Japanese economy.
Reform Timeline and Priorities
The LDP’s policymakers have prioritized drafting a tax reform outline during the final days of 2024. This outline will serve as the foundation for next year’s tax reforms. CoinPost warns that failing to prepare a proposal this year would make implementing changes in 2025 extremely difficult. In Japan, tax reform proposals are typically submitted at the end of the calendar year and reviewed by parliament the following year.
Timing Critical Ahead of U.S. Political Changes
Digital Affairs Minister Takuya Hirai emphasized the importance of timing, as Donald Trump’s administration will take office in January 2025. Hirai noted the urgency of adopting clear policies on taxes, regulations, and cybersecurity before this shift in global political leadership. “We must ensure comprehensive reforms to strengthen Japan’s position in the crypto market,” Hirai stated.
Opposition Demands for Fairer Taxation
Voices outside the LDP, including opposition leaders and industry experts, have criticized Japan’s current taxation system. They claim it drives capital out of the country and deters investors. Unlike other nations that levy a flat capital gains tax of around 20%, Japan requires cryptocurrency profits to be filed under “other income” on annual tax declarations. This system results in high-income earners paying up to 55% in taxes on their crypto gains.
Prime Minister’s Cautious Approach
Although Prime Minister Ishiba has appointed crypto-reform advocates to key positions and mentioned blockchain in his manifesto, he has avoided committing to specific reforms. Recent weeks have seen him sidestep discussions on tax revisions and the launch of Bitcoin spot ETFs in Japan. Despite this, the Headquarters for the Promotion of a Digital Society has reiterated the “urgent” need for reforms to enhance Japan’s global competitiveness in the crypto sector.
Japan’s Progress in Crypto Legislation
Minister Hirai noted on social media that the LDP’s efforts in crypto legislation are advancing faster than those of any other political party worldwide. The government’s goal is to solidify changes in cryptocurrency policy, including tax reforms, regulatory measures, and enhanced cybersecurity, by early 2025 to align with international standards and foster economic growth.
The post Japan’s Ruling Party Still Pushing for Crypto Tax Reform Despite PM’s Caution appeared first on Cryptonews.
