Japan will promote multiple cryptocurrency policy reforms, including dropping the tax rate to 20%.

According to the report by CoinPost, the ruling Liberal Democratic Party of Japan announced a series of adjustment directions for the controversial 'Cryptocurrency' tax system in the tax reform outline released on the 20th. The recording of this outline marks a significant increase in the possibility of future tax system adjustments, laying the foundation for accelerating the development of the Cryptocurrency industry and enhancing international competitiveness.

Currently, in Japan, the taxation of Cryptocurrency transactions falls under the category of 'miscellaneous income', with the highest tax rate reaching as high as 55%. In addition, the exchange of Cryptocurrencies is also subject to taxation, and it is not possible to offset gains and losses across fiscal years. These high tax rates and restrictions have become important reasons for the outflow of industry talents and enterprises, and also pose a threat to the competitiveness of the domestic Web3-related innovation field in Japan.

Direction and Focus of Tax Reform

According to the content of the tax system reform outline, the Liberal Democratic Party will focus on promoting the following directions for Crypto Assets.

Include cryptocurrency trading in the declaration of separate taxation categories: reduce the target tax rate to 20%, and allow investors to declare at a fixed tax rate, making the tax system more clear.

Improve relevant laws and regulations: Positioning cryptocurrency as financial commodity supervision, and strengthening investor protection and trading firm reporting obligations.

Promote the assetization and security enhancement of the economy: Enhance network security measures to ensure that Crypto Assets can continue to be an important asset of the national economy.

Members of the Liberal Democratic Party's digital department and the first Digital Minister, Member of Parliament Takuya Hirai, have submitted an urgent proposal to the Financial Services Agency and relevant officials, and have received a certain level of support. If the future system design can be realized, it will significantly reduce the tax burden and also attract more domestic and foreign investors to stimulate industry development.

Although this outline is only in the "review stage", specific measures still need further discussion and improvement. However, being written into the outline is a major progress. If the relevant tax system adjustments are ultimately implemented, it is expected to include investor-friendly policies such as lowering tax rates to 20%, allowing profits and losses to be carried over across years, etc.

In addition, the outline also mentions the issue of the "annual income threshold of 1.03 million yen for taxation" unrelated to cryptocurrency. The plan is to raise the tax exemption standard to 1.23 million yen and gradually reach 1.78 million yen. This is aimed at alleviating the tax burden on low-income families and supporting labor market dynamics.

The series of measures in the Japanese political arena demonstrate its determination to gradually adapt to the digital economy and financial innovation trends, creating a more fair and competitive tax environment for the Crypto Assets industry. The Japanese industry generally looks forward to further relaxation and deepening of Japan's policies in the coming years, making Japan one of the important markets in the global Crypto Assets market.

The article 'Japan to push for a number of cryptocurrency policy reforms, including lowering the tax rate to 20%', was first published in 'Block Ke'.