Crypto Lobbying Groups In Japan Want FSA To Reduce Corporate Tax On Digital Assets
- Japanese crypto lobbying groups aim to submit a proposal to the FSA in hopes of reducing the corporate tax on cryptocurrencies
- The memo seen by Bloomberg also mentions the reduction of individual carypto tax to 30% from as high as 55%
Japanese regulators have tightened their control on crypto-based companies, imposing stricter laws and a corporate tax of about 30% on profits from crypto holdings and unrealized gains. However, crypto lobbying groups in the country have recently expressed their concerns over the situation as they believe this could affect the local digital asset industry’s growth.
Two of the top crypto lobbying groups — the Japan Virtual and Crypto Asset Exchange Association and the Japan Cryptoasset Business Association (JCBA) — are reportedly planning to ask the authorities to ease corporate tax laws.
According to a recent report by Bloomberg, the two groups are preparing to submit a proposal to the Financial Services Agency (FCA), urging it to make it cheaper for crypto companies to issue and hold cryptocurrencies.
The imposition of a 30% corporate tax on all profits, has made it expensive for companies to hold onto digital coins after issuance. This becomes an obstacle for companies innovating and launching crypto projects. The tax is also levied on so-called governance tokens, which give holders the ability to vote on companies’ business decisions.
Prime Minister Fumio Kishida’s commitment to advancing Japan’s so-called Web3 sector as part of an effort unveiled last month will be put to the test by the calls from the crypto industry. Some Japanese businesses have already moved to nations like Singapore due to high taxes, which are overly burdensome for many cash-strapped entrepreneurs.
The report said that a spokesperson from JCBA said that the two groups would possibly submit the proposal to the FSA as early as this week.
According to the email, the lobby groups also intend to urge the government to impose a uniform 20% income tax on individual investors’ crypto gains rather than subject them to rates that can go as high as 55%.
The report cited an anonymous FSA official that said that the regulatory body is yet to decide “whether to include this proposal in its annual revision suggestions to be submitted in August to the tax authorities, though isn’t ruling it out.”
Politicians have already discussed the necessity of digital technology to spur economic development in Japan. Masaaki Taira, a vocal proponent of cryptocurrency who is a member of the ruling Liberal Democratic Party, has been pushing the finance ministry and other lawmakers to make adjustments to stop the outflow of digital talent.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
