Author: Brayden Lindrea, CoinTelegraph; Translated by: Wuzhu, Golden Finance

Yuichiro Tamaki, leader of Japan’s Democratic Party of Progress (DPP), has proposed a cryptocurrency taxation plan that would reduce the tax on cryptocurrency gains to 20% if he is elected.

“If you think crypto assets should be taxed at a separate 20% instead of being treated as miscellaneous income, vote for the Democratic Party,” Tamaki said in a translated X post on Oct. 20.

But the plan may be far from being realized, as Tamaki's Democratic Party currently holds only seven seats out of the 465 seats in the House of Representatives, also known as the lower house of Japan's National Diet.

A 20% tax on cryptocurrency gains would bring them in line with the taxes paid on stock market profits.

Under Tamaki’s plan, no tax event would be triggered when trading one crypto asset for another.

“I would be very grateful if you could promote these promises that the Democratic Party has made to the people,” Tamaki stressed.

DPP policy statement. Source: DPP

Responding to X user Shonai Dog, Tamaki said the DPP will consider implementing tax cuts on other financial income in the future — but for now, it’s focused on making Japan a leader in the Web3 space:

“We want to make Japan a powerhouse for Web3 business.”

Japan's general election will be held on October 27. The main proposition of the Democratic Party to voters is to increase take-home pay to fight inflation.

Earlier this year, on August 30, Japan’s Financial Services Agency released plans for an overhaul of the country’s tax code for fiscal 2025, which included provisions to reduce taxes on crypto assets.

Crypto profits in Japan are currently taxed as miscellaneous income at rates ranging from 15% to 55%, depending on the individual’s income.

According to crypto tax firm KoinX, crypto taxes can be as high as 55% for individuals earning more than 40 million yen ($268,000).

In contrast, profits earned from stock trading are taxed at a maximum rate of just 20%.

Meanwhile, corporate cryptocurrency holders must pay a flat 30% tax on their holdings at the end of the financial year — even if they don’t make a profit from selling them.

A recent opinion poll by local news outlet Mainichi Shimbun showed Tamaki's Democratic Party had little chance of winning Japan's general election.

The LDP and its coalition partner Komeito are expected to retain their 465-seat majority, while the Democratic Party's representation could increase to as many as 20 seats from seven.