The Japan Blockchain Association(JBA) has asked the government to change the tax system to consider cryptocurrency. JBA asserted that their analysis of the present tax structure shows that the development of web3 businesses in Japan is constrained. In particular, it asked to cancel taxes on earnings from cryptocurrency transactions and set the tax on personal transactions at a flat rate of 20%.
JBA wants crypto tax reforms
The Japan Blockchain Association has asked the government to change the tax legislation about cryptocurrencies and digital assets under the leadership of Yuzo Kano, the Representative Director of bitFlyer Co., Ltd., who acts as a representative director for the organization.
JBA suggested three reforms aimed at strengthening the nation’s position in the distributed web3 wave and creating an atmosphere where its citizens “can own and use crypto assets.” The document contends that removing year-end unrealized gains tax will motivate companies to enter the web3 market. The request form highlighted that selling tokens to pay taxes might result in the token’s price falling under the present tax system, which would impede the expansion of token-enabled enterprises.
As a result, JBA wants the taxation approach changed to apply a uniform 20% rate rather than the present system, which taxes each transaction involving a crypto-asset individually. JBA also wants to do away with income taxes levied on cryptocurrency gains following a transaction.
According to statistics from the Japan Crypto Asset Exchange Association, there are about 6.8 million crypto accounts as of April 2023. Hence, the JBA feels investment would rise if the regulators changed taxation.
Meanwhile, Japan’s Prime Minister, Fumio Kishida, stated earlier this week that web3 could revolutionize the established internet infrastructure and contribute to societal transformation and that the government is committed to creating an environment that supports web3.
The JBA’s stance comes as cryptocurrency companies express interest in other countries’ regulatory environments as the regulatory environment in the U.S. continues to heat up. According to recent reports, Binance Exchange has indicated an interest in entering Japan following its legal challenges in the U.S., among other regions.
