According to reports, the Japan Blockchain Association (JBA) is calling on the government to make significant changes to the tax rate for crypto assets. The main proposals include lowering the tax rate on personal transactions to a flat 20%. The proposals also include completely eliminating taxes on profits from the sale, which currently have a maximum rate of 55%.

Japan Blockchain Association Aims to Eliminate Unrealized Gain Tax Rate for Crypto Tokens

Since April 2023, approximately 6.8 million cryptocurrency accounts have been opened in Japan. It indicates a growing interest in digital assets. Surveys conducted among crypto users revealed that 43.9% of respondents believe that investments will increase. It will increase by more than 100% if the suggested tax policies are implemented.

On February 28th, the Japan Blockchain Association, led by Yuzo Kano, the representative director of bitFlyer Inc. He officially approached the government and urged them to reconsider the taxation of crypto assets. The JBA emphasized the need to create an environment where citizens can freely own and utilize crypto assets. The association highlighted two major changes that need to be made:

Firstly, they proposed to remove the unrealized gain taxation on tokens issued by third parties at the end of the year. The recent change in the law by the National Tax Agency was a step in the right direction. However, the year-end unrealized profit tax on tokens issued by third parties still poses a hurdle for domestic enterprises entering the Web3 market. Eliminating this tax would encourage companies to hold their token holdings instead of selling them to cover taxes.

Secondly, the JBA suggested adopting a standard 20% tax rate for all crypto-asset transactions. This move aims to simplify tax procedures. It will provide benefits to investors, such as the ability to deduct and carry forward losses for three years.

JBA Seeks Tax Reforms to Boost DeFi and NFT Markets

Furthermore, profits made from the purchase and sale of cryptocurrencies should be exempt from taxation. It is expected to enhance the efficiency of crypto assets and boost the growth of DeFi and NFT marketplaces.

The JBA believes that the success of the Web3 economic zone relies on the government’s willingness to implement tax reforms. They view their proposals as crucial for fostering development in the crypto sector. Additionally, they anticipate positive impacts on tax revenues due to increased crypto-asset usage and investments.