December 28, 2023
By Anjali Kochhar
The government of Prime Minister Fumio Kishida has been reviewing suggestions on how to support the growth of the sector, which it views as a cornerstone of economic transformation.
According to CoinDesk Japan, the ruling Liberal Democratic party of Japan proposed that the tax on unrealized cryptocurrency gains be eliminated. This is expected to have a positive impact on the growth of the Web3 business in the country. The proposal was approved by the cabinet.
The plan would eliminate company taxation on the difference between the market and book values of cryptocurrency assets issued by other businesses. It must be discussed in the Diet, the Japanese parliament. The Dec. 22 approval, if it were to become law, would eliminate a disparity in the treatment of assets issued by holders, who are not subject to mark-to-market taxes, and assets issued by third parties. According to CoinDesk Japan, the fee has made Web3 enterprises in the country more challenging.
The administration of Prime Minister Fumio Kishida has been debating suggestions from trade groups including the Japan Blockchain Association and the Japan Crypto Asset Business Association (JCBA) over how to best support the growth of this sector, which it views as a cornerstone of economic reform. In a nation where bureaucracy often assumes this role, having politicians lead policy making is a change from custom.
According to Gaku Saito, chairman of the JCBA’s tax review committee, Web3 companies have been relocating offshore since they were subject to taxes even before they generated revenues from their operations. Saito made this revelation in an interview with CoinDesk Japan. Businesses were being forced to liquidate their assets and stifle corporate development because they were having to pay taxes on unrealized gains.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
