Currently, Japanese crypto companies pay a flat 30% corporate tax rate on their holdings, regardless of whether or not they made a profit. Due to this strict tax law in recent years, some local crypto companies have reportedly chosen to move their business elsewhere.
This development has impacted the economic growth of the country, and the PLD, having identified it as its main task, wants to put things right.
Japan’s Liberal Democratic Party (LDP) addresses problems with administrative reform and collaborates with the US to enact defensive and foreign policies.
The term Administrative Reform refers to multiple issues in the nation. An example of such issues is the adoption of measures such as tax reform to withstand the test of economic stress.
Japan prepares to ease strict tax rules
In line with its goals of promoting rapid economic growth, the Japanese ruling party’s (LDP) fiscal committee held a meeting on December 15. The meeting was to deliberate on fiscal reforms. As they did so, they approved a proposal submitted in August. The proposal seeks to eliminate taxes on the paper profits of crypto companies from issuance or custody tokens.
The Japanese government seeks to ease the tax requirements of domestic crypto companies to facilitate the growth of the technology and financial sectors. The presentation of more lenient crypto tax laws to parliament will start in January and take effect in the next fiscal year from April.
The total cryptocurrency market falls by 2.53% | Source: Crypto Total Market Cap at TradingView.com
LDP legislator and Web3 policy office member Akihisa Shiozaki discussed the recent development in an interview with Bloomberg. Shiozaki noted that the move is a step forward in economic reforms. He added that it would allow more companies to start token issuing businesses.
Japan’s Passion for Digital Currency Remains Undaunted Despite Crypto Winter
The new move by the Japanese government suggests that it is interested in promoting and fostering the growth of the domestic cryptocurrency and Web3 sector. It also indicates that the current downtrend in the crypto industry, including the FTX crisis, did not affect their interest in blockchain technology.
Japanese Prime Minister Fumio Kishida stressed the roles of NFTs, blockchain, and Metaverse in the country’s digital evolution in a statement in October. He cited practical examples using the digitization of national identity documents.
In October, the Japan Crypto and Virtual Assets Exchange Association announced plans to ease the strict selection process for listing tokens on exchanges. Kishida addressed this issue in June, asking the organization to relax its strict rules on the selection process.
Some of the top leaders in the private sector also shared the same thoughts with the Prime Minister. On Dec. 8, Sumitomo Mitsui Financial Group (SMBC) announced an ongoing project to explore use cases for soul-bound tokens (SBTs).
SBTs were part of Ethereum co-founder Vitalik Buterin’s proposal to use tokens to represent people’s digital identity.
This post The Japanese government will ease the 30% crypto tax requirement
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