The Japanese Democratic Party election promises to separate cryptocurrency from the tax ceiling of 20%, promoting Japan as a Web3 powerhouse.

Japanese Democratic Party (DPP) leader Yuichiro Tamaki recently proposed a tax reform plan related to cryptocurrency. He stated that if elected, he would lower the capital gains tax on cryptocurrency to 20%. This plan is part of his initiative to make Japan a Web3 country. However, the Democratic Party, to which Tamaki belongs, currently has limited seats in the Japanese House of Representatives, so it remains to be seen whether this policy can be implemented.

Why does Japan's favorable cryptocurrency tax system benefit the stock price of the Japanese version of MicroStrategy, Metaplanet?

Policy Update: Cryptocurrency Taxation to be Adjusted to Maximum 20%

Yūichirō Tamaki announced on 10/20 via Twitter that he plans to adjust the capital gains tax on cryptocurrencies from the current "miscellaneous income" model to a flat 20% rate, aligning it with securities trading. He urged voters to support this plan and emphasized that the Democratic Party is the only party supporting this tax reform.

Reducing Tax Burden under Current Policies, Driving Japan to Become a Leader in Web3

On 8/30 this year, the Japanese Financial Services Agency released plans for a comprehensive reform of the tax law by 2025, including provisions to lower taxes on crypto assets. Currently, Japan taxes cryptocurrencies based on "different levels of personal income," with rates ranging from 15% to 55%, including capital gains tax and other taxes.

If an individual's annual income exceeds 40 million yen, approximately $260,000, they would have to pay up to 55% in taxes. In comparison, Japan's securities trading tax only goes up to 20%.

Tamaki's plan also includes a significant change where no taxes will be levied on exchanges between different cryptocurrencies, greatly reducing the burden on cryptocurrency investors. He emphasized that this tax reform is not only to attract cryptocurrency investors but also a strategic move to drive Japan to become a powerhouse in the Web3 sector. He stated that he aims to make Japan a strong player in the Web3 field, aligning with his policy proposal to increase the real income of the people and address the challenges of inflation.

Japanese Financial Services Agency reforms cryptocurrency payment regulations, optimizes cryptocurrency asset handling processes, and tax systems

Current Challenge: Democratic Party Still in a Weak Position

However, according to a report by Japanese media, the Japanese House of Representatives has a total of 465 seats, with Tamaki's Democratic Party currently holding only 7 seats. In the upcoming election on October 27, they are expected to increase to a maximum of 20 seats. Meanwhile, the Liberal Democratic Party and Komeito coalition are expected to maintain the majority of seats, so the realization of Tamaki's plan remains to be seen.