Japanese Finance Minster: Tokyo Will Review Crypto Tax System ‘by June’

#cryptonews

The Japanese Finance Minster Katsunobu Kato has promised Tokyo will review the nation’s controversial and much-maligned crypto tax laws by the end of June this year.

Per the House of Representatives’ official website and a report from the Japanese-language media outlet Iolite, Kato made the comments at a plenary session of the House of Representatives on the 31st.

Kato explained that the Financial Service Agency (FSA) will issue a review “based on the ruling party [LDP]’s tax system proposals.” He added that the review would include recommendations on “necessary legislative amendments.”

Kato was responding to a question from the Liberal Democratic Party (LDP) lawmaker Akihisa Shiozaki, the head of the party’s Web3 Digital Society Promotion office.

Japanese Finance Minister: Regulators Readying Crypto Tax Review

Ishiba added that it was “important” for the government to “ensure user protection” and “improve the environment” of the domestic crypto market.

Prime Minister Shigeru Ishiba also waded into the discussion by “expressing his belief that cryptoassets” would “contribute to solving Japan’s social problems and improving productivity.”

This, Kato said, will ensure any necessary changes are “put in place” before the new rules roll out. Existing Japanese law defines crypto as a type of “payment instrument.” But the minister said that “in reality” coins like Bitcoin (BTC) are “mainly traded for investment purposes.”

The minister said the FSA will also outline its proposed changes to the nation’s tax authorities.

Regulator’s Report Key

Since the FSA began policing the Japanese crypto market in earnest in 2017, the agency has had the last word on all related regulations.

He added that the FSA has “indicated an intention” to “take in a wide range of opinions” before making an official recommendation “on the appropriateness of” crypto’s current “legal status.”

Ishiba, however, has been more cautious on the matter of tax reform. But he has also made a number of more conciliatory comments about crypto and blockchain. Shiozaki’s department has called for faster action, claiming late last year that its proposal to reform crypto tax was of “urgent” importance.

Ishiba’s predecessor Fumio Kishida took a relatively progressive stance on crypto regulation.

PM’s Caution

Japanese traders must file their crypto trading profits on annual tax returns as “other income.” This means that the wealthiest crypto traders in Japan must hand over up to 55% of their trading profits to the Treasury.

This runs in contrast to many other countries, which impose flat capital gains levies on traders (at rates of around 20%).

Japanese tax laws require crypto traders to report their profits on their yearly income tax returns.

This measure could see crypto included as an asset class under the terms of the Financial Instruments and Exchange Act. If true, this would appear to indicate that the FSA and the Japanese Finance Minster now share a common stance on reform.

Many critics and Japanese crypto investors claim the Japanese crypto market is over-regulated. This, they claim, has stifled growth in the web3 and crypto sectors.

‘Unfair’ Tax Laws