Japan is looking to boost Web3-related growth by overhauling its much maligned crypto tax laws. The Japanese Prime Minister Fumio Kishida has indicated that he may be open for reform in order to spark the industry’s development with new policies.
Last week, the Prime Minister addressed parliament and shared that Web3 could lead to economic growth. Kishida suggested that he could be prepared to push pro-business legal reform. Earlier in May, he spoke to British investors to discuss Web3, the metaverse, blockchain technology, and non-fungible tokens.
Despite the progress, critics have claimed that Japanese crypto-related business and talent were forced overseas by overly strict crypto tax policies that were introduced by previous prime ministers and their governments. Among the most vocal oppositions of the current crypto tax policy (which involves crypto getting classified as miscellaneous income rather than taxing crypto profits under capital gains laws) is Yuichiro Tamaki, leader of the Democratic Party for the People.
Tamaki recently called for Tokyo to uproot the current system and make further tax concessions for domestic companies involved with crypto assets. He challenged the Prime Minister on the matter again during a meeting of the parliamentary budget committee on the same day. Tamki claimed that the government should only tax companies and individuals “when actual [fiat] profits are realized,” like when coins are traded for fiat. The Prime Minister acknowledged his concerns and answered, “We will consider this proposal carefully.”
Although the meeting may have concluded amicably, Tamaki revealed on Twitter that Kishida and the Minister of Finance, Shunichi Suzuki, came over to greet him. When he raised the issue of taxes, the Prime Minister agreed that doing so would provide the country great opportunities, showcasing a surprisingly positive attitude about abandoning the current system, leading to even more positive development.
Forces from within Kishida’s own party, the ruling Liberal Democratic Party, are believed to be keen to amend the tax code. Some critics have pointed out that other nations with advanced crypto tax laws have chosen to tax crypto earning using capital gains tax protocols. The Prime Minister had previously spoken about improving the environment to incorporate new digital services in the Web3 sector.