Japan’s crypto advocates propose tax cuts to stop talent exodus

Japanese cryptocurrency advocacy groups will petition the government to relax corporate tax regulations, allowing the growth of the country’s digital asset industry.

In accordance BloombergThe Virtual and Crypto Assets Exchange Association (JVCEA) and the Cryptoasset Business Association (JCBA) are getting ready to submit a proposal to the Financial Services Agency (FSA) asking it to cut the costs for businesses to issue and hold cryptocurrency tokens.

Japan’s Web3 “brain drain” due to tax

Currently, Japan imposes a 30% corporate tax on digital assets, including unrealized gains. Lobby groups will push the government to suspend taxation of paper profits on cryptocurrency holdings if companies hold them for reasons other than short-term trading, according to the document.

This is no doubt done to reduce the flow of talent from the domestic crypto market and make it a lucrative hub for treasury investments.

The groups want to reduce the current tax rate on individual investors from up to 55% to 30%.

In April, the operator of BitFlyer, one of Japan’s leading cryptocurrency exchanges, was acquired by ACA Group, a Japanese private equity group with offices in Singapore, a lower-tax jurisdiction.

“Japan is an impossible place to do business,” Sota Watanabe, CEO of Web3 infrastructure developer Stake Technologies, told Bloomberg.

“The global battle for Web3 hegemony is underway, and yet Japan is not even at the starting line,” Watanabe added.

With reports of Japanese Web3 companies shifting bases, the proposal could be presented to authorities as early as this week, a JCBA official said.

Japanese Banks on Web3

Earlier this month, the country’s Ministry of Economy, Trade and Industry (METI) established a Web3 policy office to not only collaborate on the digital front, but also to better understand the challenges in the sector.

“The Web3 Policy Office will gather information from business operators, investors, legal professionals, engineers and other parties regarding the issues facing Japan’s and foreign business environments and cooperate with relevant ministries and agencies to develop the business environment for Web3,” METI announced.

And one of the largest banks in Japan, Sumitomo Mitsui Banking Corporation (SMBC), also recently announced its intention to move into the non-fungible token (NFT) and Web3 space.

Disclaimer

All information on our website is published in good faith and for general information purposes only. Any action the reader takes on the information contained on our website is strictly at their own risk.