The Japanese Prime Minister Fumio Kishida has indicated that he may be open to reforming the nation’s much-maligned crypto tax laws in a bid to spark Web3-related growth.
Kishida last week addressed parliament, opining that Web 3 could spark economic growth, and suggesting that he could be prepared to push ahead with pro-business legal reform. Earlier this month, he also spoke to British investors about Web 3, also making comments about the metaverse, blockchain technology, and non-fungible tokens (NFTs).
But critics have claimed that Japanese crypto-related business and talent had been forced overseas by overly strict crypto tax policies introduced by previous PMs and their governments. One of the most vocal opponents of the current crypto tax policy, which involves crypto being classified as miscellaneous income (rather than taxing crypto profits under capital gains laws) has been the opposition Democratic Party for the People Leader Yuichiro Tamaki.
The latter recently called for Tokyo to do away with the current system and make further tax concessions for domestic companies that hold or issue cryptoassets.
Tamaki again challenged the PM on the matter at a meeting of the parliamentary budget committee on the same day. Tamaki claimed that the government should only tax companies and individuals “when actual [fiat] profits are realized”, i.e. when coins are traded for fiat.
To this, the Prime Minister simply answered, “We will consider this proposal carefully.”
But on Twitter, Tamaki stated that after the meeting’s conclusion, Kishida and the Minister of Finance Shunichi Suzuki came over to greet him. When the Democratic Party for the People chief again raised the issue of taxes, the PM agreed that doing so would provide “opportunities for Japan” – and was “surprisingly positive” about the idea of ditching the current system.
Tamiki called the development “good news.”
Forces from within the PM’s own party – the ruling Liberal Democratic Party – are believed to be keen to amend the tax code. Some critics have pointed out that most other nations with advanced crypto tax laws have chosen to tax crypto earnings using capital gains tax protocols.
Kishida has previously spoken about “improving the environment” in order to “incorporate new digital services” in the Web3 sector.
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