The Japanese prime minister Fumio Kishida believes Web3 has the potential to spark economic growth. As such, he highlighted that he could be open to reforming Japan’s crypto tax laws and pushing for pro-business legal reform.
Speaking to British investors earlier this month about Web3, Kishida acknowledged the potential of new-age technologies – blockchain technology, the metaverse, and NFTs. But previous Japanese governments with their strict crypto tax policies have driven away crypto-related businesses and talent to foreign shores. The East Asian country’s current crypto tax policy classifies digital assets as miscellaneous income. This pushed crypto project founders to dissolve their entities in Japan and move to other countries.
Genki Oda, president of crypto exchange BITPoint, described Japanese tax regulation as “crazy and wrong”. He highlighted that if the Japanese authorities were looking to make the tax law on crypto equivalent or stocks, about USD 88 billion to USD 177 billion would return to the country’s crypto markets.
Yuichiro Tamaki, the opposition leader of the Democratic Party for the People, called on the government to do away with the current policy. He wants tax concessions for domestic companies that hold or issue crypto-assets. Tamaki also challenged Kishida on crypto tax policies. The opposition leader said the government should tax companies and individuals when actual fiat profits are achieved. This will happen only when the crypto coins are traded for fiat.
The PM said he will look into the proposal. He also agreed to do so would provide opportunities for Japan. Tamaki noted that Kishida was surprisingly positive about the idea of doing away with the current system. The PM had previously highlighted improving the environment to incorporate new digital services in the Web3 ecosystem.