Japan is expected to pass a comprehensive economic stimulus package, including a 20% flat tax on cryptocurrency, by the end of 2024.
According to Bloomberg, the Japanese government, under the leadership of Prime Minister Shigeru Ishiba, is preparing to implement a new economic stimulus package, which includes significant tax adjustments. The reform package, expected to be finalized by the end of 2024, focuses on personal income tax, corporate tax, and particularly cryptocurrency tax.
This is seen as an important shift for the ruling party, which previously prioritized tax-raising policies. This move comes as the Japanese economy faces growth pressures, and economists consider the current situation a "difficult problem to solve".
Currently, Japan applies a "miscellaneous income" tax of up to 55% on cryptocurrency profits, causing many issues and barriers to the development of the digital asset market. The complexity of the tax calculation has made many investors concerned, reducing the attractiveness of this sector.
In response to these issues, the opposition party and economic experts have proposed a 20% flat tax rate similar to the tax rate on securities profits, in order to create a more transparent and stable investment environment.
In addition to cryptocurrency tax reform, the Japanese government is also considering raising the tax-free income threshold from $6,650 to $11,345, reducing fuel taxes, and cutting consumption taxes until the labor market recovers to a minimum of 2%. These measures are expected to stimulate consumption and improve the purchasing power of the people.
The change in cryptocurrency tax policy comes after the prime ministerial election in September, when Shigeru Ishiba narrowly defeated his opponent Yuichiro Tamaki. Notably, Tamaki had strongly committed to making Japan a pioneer in the Web3 field and reforming digital assets.
Although he lost, the election results show the growing public interest in cryptocurrency and Web3, putting significant pressure on the ruling Liberal Democratic Party (LDP). The LDP's loss of 68 seats in the Lower House reflects not only a change in voter sentiment but also opens up opportunities for bipartisan cooperation on reform policies, particularly cryptocurrency taxation.
