Japanese Regulators Propose Tax Relief For Crypto Investors

Japanese financial regulatory authorities made an announcement earlier this week proposing relaxation of tax rules for crypto assets along with lighter levies for individual stock investors. This proposal from Japan’s financial watchdog is said to be made as part of Prime Minister Fumio Kishida’s efforts to renew and revamp the nation’s economy. This proposal came in an announcement earlier this Wednesday as part of the Financial Services Agency’s annual tax code change request. This proposal stated that companies which handle crypto assets need not pay any tax for paper gains on crypto coins a company holds after issuing them. Alongside this proposal for institutional investors, the request from the regulatory authority also called for promoting a program which will bring similar benefits to individual investors.

Prime Minister Kishida’s efforts aimed at revamping the nation’s economy are a part of his “New Capitalism” vision. As part of this vision, Kishida has pledged to double the wealth of households across the country while offering to support to help web3 and related businesses grow as he believes helping crypto-related industries develop will help the world’s third largest economy is seeing a significant boost to its growth. Crypto lobbyists have repeatedly stressed that high corporate taxes prevent the launch of new projects in Japanese markets resulting in companies migrating to other foreign markets like Singapore. Lobbying groups have been calling for changes as the current taxing system in the nation subjects a corporate tax of 30% for any profit from cryptocurrency-related holdings including unrealised gains. When it comes to retail investors, the FSA’s proposal requests the creation of a new tax break initiative named “Nippon Individual Savings Account” in form of a permanent program.

This program also called “NISA” will allow account holders higher investment limits alongside exemption from some of their investment gains and dividends from capital gains tax for a fixed period of time. These relaxation proposals are part of years of effort made by the government to encourage its citizens to channel their savings into some form of investment in stocks and other financial assets thereby indirectly helping with the growth of their economy. According to data from the Bank of Japan, the country’s households still retain nearly half of their 2 quadrillion yen ($14.5 trillion) worth of financial assets in cash and savings accounts deposits. Even a marginal infusion of funds from households will go a great way in helping boost economic growth. The ruling party’s tax panel is expected to make decisions on the same before the end of this year after reviewing proposals from various government offices.

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