Japan’s Blockchain Association (JBA) Urges Government to Revise Tax Rules on Virtual Assets
The JBA has called on the Japanese government to reform its crypto tax rules in order to foster the growth of Web3 in Japan. The association argues that the current tax system hinders the development of the crypto sector in the country. The JBA proposes three reforms to the tax rules:
1. Eliminate Year-End Unrealised Gain Tax on Third-Party Issued Tokens: The JBA argues that the tax exemption for companies issuing cryptocurrencies should also apply to third-party token issuers, as the current tax on unrealised gains acts as a barrier for domestic companies entering the Web3 space.
2. Change the Taxation Method for Individual Crypto Asset Transactions: The JBA suggests implementing a separate self-assessment taxation method with a uniform 20% tax rate. This would allow individuals to carry forward and deduct losses in the following three years, reducing their tax burden.
3. Eliminate Income Tax on Profits for Every Crypto Asset Transaction/Exchange: The JBA believes that removing income tax on crypto asset transactions and exchanges will create an environment that encourages citizens to invest, leading to increased tax revenue for the government.
The JBA’s proposed revisions aim to create a crypto-friendly environment in Japan where more domestic companies can enter the sector and citizens can freely own and use crypto assets.
Hot Take:
The JBA’s call for tax reform in the crypto sector is a crucial step towards fostering the growth of Web3 in Japan. By eliminating barriers such as unrealised gain tax and income tax on profits, the government can create a more favorable environment for companies and individuals to participate in the crypto economy. This move would not only benefit the industry but also increase tax revenue for the government. It is important for regulators to recognize the potential of cryptocurrencies and blockchain technology and implement policies that encourage innovation and investment in this rapidly evolving space.
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