Leader of Japan’s DPP commits to crypto tax cuts ahead of election
Yuichiro Tamaki, leader of Japan’s Democratic Party for the People (DPP), has outlined that if elected the party will introduce a crypto tax plan that will bring about the lowering of taxation on crypto gains to 20%.
Tamaki’s comments come ahead of the Asian nation's elections, which are due to be held on Oct. 27. Taking to the X social media platform on Oct. 19, Tamaki wrote:
“If you think crypto assets should be taxed separately at 20% instead of treated as miscellaneous income, please vote for the Democratic Party for the People. There will be no tax when exchanging crypto assets with other crypto assets.”
Crypto taxation reform
The DPP leader added that he would be appreciative of people spreading the word and letting the broader Japanese public know about this commitment that is being made in respect of crypto taxation reform.
The reduction to 20% would bring the treatment of crypto in line with that of the stock market in Japan, where gains are already taxed at the 20% tax rate. The DPP leader included a graphic within his X post that provided further detail. It outlined that a loss carry-forward deduction could be applied by the taxpayer within a three-year timeframe.
A tax exemption would apply when it comes to the exchange of crypto assets. The DPP is also in favor of increasing the permitted leverage multiple from 2x to 10x relative to crypto trading. Finally, the party supports the introduction of spot crypto exchange-traded funds (ETFs) in Japan.
Focusing on developing Web3
In response to an X user, Tamaki claimed that the DPP would consider a reduced taxation policy to be inclusive of other financial income in the future. However, for right now, the DPP leader said that the focus was on making Japan “a strong nation in the Web3 business.”
Another Japanese crypto community member suggested that the proposed tax cut would lead to an increase in tax revenues, based upon the assertion that many people don’t file tax returns simply because tax calculations are too difficult right now.
While the plan is positive for Japan’s crypto community, the DPP is unlikely to be in a position to implement such a plan. The party currently holds just seven of the 465 seats in the National Diet, the Asian nation’s House of Representatives.
Tax reform guidelines
Currently, the applicable tax rate applied to crypto revenues can reach as high as 55% in Japan. At the end of August Japan’s Financial Services Agency (FSA) unveiled new tax reform guidelines for 2025. One component of those proposals was the suggestion that the crypto tax rate should be reduced to 20%. With that, if Tamaki’s DPP can’t influence matters, the regulator’s proposals may be of sufficient weight to have the matter addressed.
The approach taken to the taxation of crypto in various jurisdictions is having a bearing in terms of the competitiveness of those locations relative to the development and further roll-out of Web3 technologies. Earlier this month, the United Arab Emirates took a positive step forward by exempting crypto from value-added tax (VAT). Meanwhile, in Indonesia the local regulator is moving towards a re-evaluation of what is considered to be a harsh taxation policy relative to crypto.
