Tax reform controversy: Government’s attitude is cold
At the plenary meeting of the Japanese House of Representatives, Prime Minister Shigeru Ishiba expressed strong doubts about the cryptocurrency tax reform, which directly impacted the development prospects of the Japanese cryptocurrency industry. In a question-and-answer session on Monday, Ishiba raised tough questions about whether people should be encouraged to invest in crypto assets, with a cautious and negative tone.
He made it clear: “Is it appropriate for the government to encourage investment in crypto assets in the same way as stocks and investment trusts? Can the public understand the application of separate taxation? These issues require careful consideration.”
Currently, Japan’s cryptocurrency tax rate is as high as 55%, which is recognized as one of the most stringent tax policies in the world. This extremely high tax rate not only hinders the development of the cryptocurrency market, but also causes the continued loss of industrial capital and talent. Tetsu Asano, a representative of the Japanese People's Party, elaborated on the serious impact of the current tax system at the meeting. He emphasized that with the rapid growth of the global crypto asset market, the current top tax rate of 55% has become a major obstacle to the development of the domestic crypto industry.
What is even more worrying is that Tetsu Asano pointed out that Web3 corporate and personal assets are continuing to flow out of Japan, which not only means potential economic losses, but also reflects the crisis that Japan may gradually become marginalized in the global crypto-fintech competition. According to preliminary statistics, more than 30 encryption-related companies have considered moving their headquarters out of Japan in the past year, seeking a more relaxed regulatory environment.
Opposition parties strongly criticized
Japan’s People’s Party leader Yuichiro Tamaki expressed strong dissatisfaction and deep concern over the Prime Minister’s response. He issued harsh criticism on social platforms:
"The gap between Japan and the United States, which is committed to becoming a Bitcoin powerhouse, is constantly widening. I will always consider, where is the strategy to turn Japan into a Web3 advanced country?"
Yuichiro Tamaki believes that Ishiba’s failure to provide a specific response to the 20% separate taxation and loss carryover deduction shows the government’s conservatism and hesitation on cryptocurrency policy.
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The opposition party insists on a significant reduction in the cryptocurrency tax rate from the current 55% to 20%, and actively promotes the introduction of crypto-asset ETFs in order to integrate with international markets such as the United States. They believe that only through more competitive tax policies can international investors be attracted and Japan’s competitiveness in the global crypto-finance field re-established.
However, Ishiba expressed cautious reservations about including crypto assets in ETFs. He made it clear that careful consideration is needed based on "whether it is necessary to make it easier for the public to invest." This attitude is interpreted by the industry as hesitation and resistance to emerging financial technologies.
Future development and policy prospects
The Financial Services Agency (FSA) has planned to review cryptocurrency-related tax policies in 2024. Despite the current tough stance of the government, the industry and opposition parties still hope that the policy will be gradually loosened. It is worth noting that the inventor of Bitcoin, Satoshi Nakamoto, took a Japanese name, so Japan has a special historical position in the field of cryptocurrency. However, the current tax policy seems to run counter to this innovative tradition.
Experts generally believe that Japan needs to find a balance between regulatory rigor and innovative development. Overly strict tax policies will not only inhibit the innovative vitality of the cryptocurrency market, but may also lead to the loss of financial technology talents and innovative enterprises. All walks of life around the world are paying close attention to the development of Japan’s cryptocurrency tax reform, which not only affects the prospects of the country’s encryption industry, but will also affect its competitiveness and status in the international financial technology field.
Currently, all parties from Tokyo to Sapporo, from cryptocurrency startups to traditional financial institutions, are paying close attention to possible changes in policy. Regardless of the final outcome, this debate over cryptocurrency taxation reflects Japan’s profound contradictions and struggles in the face of financial technology innovation.
Further reading
Shigeru Ishiba pushes for tax reform! Will the tax on crypto assets be reduced to 20%? Will Japan’s digital economy rise?
Shigeru Ishiba becomes Prime Minister of Japan! Appoint crypto-friendly MPs as digital ministers, revealing future prospects
"Japan's crypto tax reform is questioned by Shigeru Ishiba!" The opposition party angrily said: Where is the agreed Web3 national strategy? This article was first published in "CryptoCity"