Japan is expected to pass a comprehensive economic stimulus package, including cryptocurrency tax reform with a fixed tax rate of 20%, by the end of 2024.
Theo Bloomberg, the Japanese government, under the leadership of Prime Minister Shigeru Ishiba, is preparing to implement a new economic stimulus package, which includes important tax adjustments. The reform package, expected to be completed by the end of 2024, focuses on personal income tax, corporate tax, and especially cryptocurrency tax.
This is seen as an important transition for the ruling party, which previously prioritized tax increase policies. This move comes amid pressures on Japan's economic growth, with economists describing the current situation as a 'difficult puzzle to solve.'
Currently, Japan applies a 'miscellaneous income' tax rate of up to 55% on profits from cryptocurrency, causing many inconsistencies and barriers to the development of the digital asset market. The complexity of the tax calculation has raised concerns among many investors, diminishing the appeal of this sector.
In light of these issues, the opposition and economic experts have proposed applying a fixed tax rate of 20%, similar to the tax rate on profits from securities, to create a more transparent and stable investment environment.
In addition to cryptocurrency tax reform, the Japanese government is also considering raising the tax-free income threshold from $6,650 to $11,345, reducing fuel taxes, and cutting consumption taxes until the labor market reaches a minimum recovery level of 2%. These measures are expected to stimulate consumption and improve the purchasing power of the people.
The change in cryptocurrency tax policy comes after the Prime Minister election last September, when Shigeru Ishiba narrowly defeated his opponent Yuichiro Tamaki. Notably, Mr. Tamaki strongly committed to making Japan a pioneer in the Web3 field and digital asset reform.
Although it failed, the election results show an increasing public interest in the cryptocurrency and Web3 sector, putting significant pressure on the ruling Liberal Democratic Party (LDP). The LDP losing 68 seats in the House of Representatives not only reflects a change in voter sentiment but also opens opportunities for bipartisan cooperation on reform policies, especially regarding cryptocurrency tax.