According to reports, two advocacy groups for cryptocurrency have submitted a request for tax reform in Japan. The group calls for reducing the tax on crypto earnings by 20%.
The two groups include the JVCEA (Japan Crypto-Asset Exchange Association) and the JCBA (Japan Crypto-Asset Business Association). Both groups have been working to ensure better tax reforms for crypto users in Japan.
Japanese Crypto Group Calls For Reform In Crypto Tax Policies
The annual 2023 tax policy request highlighted important concerns that advocacy organizations feel prevent the government from adopting cryptocurrencies. The request concentrated on the importance of reform in the framework for crypto tax compliance.
Also, the group talked about the significance of cryptocurrencies in the country’s Web3 agenda. It compared the country’s tax reform with that of other countries.
Additionally, the statement suggested that individual crypto accounts should be subject to a special 20% tax. Also, they should be allowed to carry deficits forward for only three years starting in the next year.
The initiative also requests that the market for cryptocurrency derivatives be subject to the same tax system. Consequently, cryptocurrency traders in Japan, who presently pay levies on their holdings of up to 55%, would benefit greatly from the 20% separate tax on cryptocurrency profits with an exclusion on unrealized gains.
Besides, the proposed tax suggestion comes only one week after a report from Coindesk revealed that Japan’s FSA (Financial Services Agency) will receive an internal letter about cryptocurrency tax adjustments.
High Crypto Tax Would Affect Private Traders And Investors
Meanwhile, the JVCEA and JCBA have been working to ensure that crypto firms prosper in the country. The group has paid much attention to tax reforms for crypto investors.
The crypto groups feel that Japan’s high crypto tax rate is a wrong move for crypto development in the country. They said it would make it difficult for firms and private traders to keep digital assets.
In 2022, governments globally have focused on crypto taxes as part of regulatory procedures. However, certain countries, such as India, have enacted high tax rates while others tried to abolish or postpone it owing to a lack of clear legislation.
Countries like Thailand forsook its proposed 15% cryptocurrency levy and excluded crypto firms from its 7% VAT. This was to enhance the usage of cryptocurrencies in the country.
Earlier this year, India implemented April 30% tax on cryptocurrency earnings. According to reports, this has affected the volume of crypto trading activities in the country.
Similarly, South Korea has delayed its 20% cryptocurrency tax policy until 2025. The country cited the need for clearer regulations before reaching a decision.