Article reposted from: Tristan Greene
Stimulus plan and tax reform proposal
Japanese Prime Minister Shigeru Ishiba promised to engage in discussions across party lines to implement comprehensive tax reform while stimulating the economy. This stimulus plan is expected to be approved by the end of 2024. According to Bloomberg, these tax reform measures include adjustments to income tax, corporate tax, and cryptocurrency tax policies. This marks a shift in the ruling party's policy, which previously favored raising tax rates.
The current cryptocurrency tax policy relies on a complex and variable 'miscellaneous income' tax rate, which can be as high as 55%. The opposition party has proposed a fixed tax rate of 20% on digital assets, along with other tax relief measures. Other planned tax cuts include raising the tax-free income threshold from $6,650 to $11,345, reducing fuel taxes, and cutting consumption tax until the job market recovers by at least 2%.
The current state of Japan's cryptocurrency market
Although the Japanese government is working to improve the economic situation by 2025, Japan's digital asset market has recently shown signs of maturity and growth. Previous reports indicated that before Shigeru Ishiba was elected Prime Minister in September 2023, Yuichiro Tamaki, as the leader of the People's Democratic Party, had pledged to reform digital assets, hoping to propel Japan to become a world leader in the Web3 field.
Although Tamaki lost the election, the ruling Liberal Democratic Party maintained its leadership, but lost 68 seats in the House of Representatives. This tense election result indicates a shift in Japan's domestic political situation and may prompt the ruling party to accelerate the promotion of a bipartisan tax reform proposal.