Japan Blockchain Association Demands Amendment of Crypto Tax Regulation

An advanced publication issued by the Japan Blockchain Association (JBA) on July 28 revealed that the crypto lawyers in the country are pushing for the amendment of the national tax on digital assets. The report outlined three effective strategies to reduce the fiscal burden on Japanese crypto enthusiasts.

In the submission, the JBA team advises the government to revise the existing crypto taxation regime. The JBA expressed their concerns on the current taxation system that hinders the growth of the crypto sector.

JBA Proposals on Crypto Tax

Additionally, the association highlighted that the imposed tax on crypto had been the “biggest barrier” limiting the growth of the Web3 sector. The lobby group mentioned that crypto taxes have discouraged the Japanese from owning substantial digital assets.

After analyzing the main factors undermining the growth of Web3 and the crypto sector in Japan, the JBA team formulated a synthesized report that outlines the practical steps to support the development of the digital economy.

In the recommendation, the JBA urged the government to do away with the “year-end unrealized returns tax” imposed on institutional clients owning crypto assets. The Japanese government had imposed a tax on unrealized profits.

The JBA proposed abolishing taxes on unrealized profits for intermediary token issuers. According to the publication, unrealized gains refer to the returns that appear in writing before or after completing the actual transaction.

Japan to Reduce Tax Burden

Even though the Japanese regulators have been seeking ways to ease tax on year-end unrealized gains from digital assets, the JBA underscored the need to eliminate such taxes on digital assets. In June, Japan’s National Tax Agency (NTA) issued a proposal highlighting the measure the government intends to take to ease the tax burden on crypto investors.

Irrespective of this, the JBA requested that the government change the taxation approach on the profits generated from individual’s crypto assets. The crypto advocacy team urged the government to implement comprehensive taxation at a constant rate of 20%. Moreover, the JBA requested the authority to extend the tax period for deducting tax on the lost value of crypto assets to three years.

On the third recommendation, the advocacy team pushed for elimination of income tax from the profit generated from buying and selling crypto assets. The JBA anticipates that the gains realized from transferring crypto assets will contribute to establishing a digital economic zone due to high transaction activity.

The JBA proposal came days after the Japanese Prime Minister reassured the government’s commitment to promoting the Web3 sector. In his speech, the prime minister announced the importance of the Web3 sector in transforming the internet and bringing change to social life.

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