• DPP plans a 20% flat tax on crypto, aiming to simplify transactions and boost Japan’s digital economy.
  • Tamaki vows no tax on crypto swaps, promoting innovation as DPP gears up for Japan’s October 27 election.
  • DPP’s crypto-friendly policies target web3 growth by introducing ETFs to attract funds and increase adoption.

Yuichiro Tamaki, the leader of Japan’s Democratic Party for the People (DPP), has recently proposed a radical change to the country’s cryptocurrency tax regulations. Tamaki said his party will impose a 20 per cent flat tax on crypto assets if elected, compared with the current system where crypto profits are categorized as miscellaneous income. 

JUST IN: 🇯🇵 Japan to cut #Bitcoin and crypto taxes from 55% to 20% if the Democratic Party of the People wins the election. pic.twitter.com/SuPY98BDiW

— Bitcoin Archive (@BTC_Archive) October 21, 2024

Currently, this taxation ranges between 15% and 55%, depending on an individual’s total income.

Separate Taxation for Crypto Exchanges

Tamaki further promised that under his plan, no taxes would apply when individuals exchange one cryptocurrency for another. This move aims to simplify transactions and foster growth within Japan’s crypto market. Tamaki added that these measures aim to put Japan at the forefront of financial innovation, especially in the digital asset space. 

The DPP, however, must overcome a major hurdle in gaining the political support it needs with the party currently having just seven out of 465 seats in Japan’s House of Representatives.

Previous Regulatory Developments

Japan’s Financial Services Agency made a detailed plan public earlier this year outlining tax code changes that will take effect in 2025, including a reduction in taxes on crypto assets. This proposal is in line with the DPP’s calls to encourage further financial innovation and growth of the sector. 

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Additionally, the DPP aims to introduce crypto ETFs as a means to increase investment opportunities in web3 markets. Tamaki emphasized that this approach would attract more funds into Japan’s digital economy, creating a new pathway for widespread adoption.

Political Landscape and Election Outlook

Japan’s national election is scheduled for October 27. The DPP is working on ambitious plans despite recent polls suggesting the party has a slim chance of winning the election. Despite this, the focus of the party’s campaign has been on addressing inflation by improving take-home pay. 

The DPP wants to set itself apart from other parties by pushing for crypto tax cuts and simplified regulations to promote economic growth and new innovations.

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