Japan’s Finance Minister is Not Interested in Reducing Tax on Cryptocurrency
According to Japan’s Finance Minister Taro Aso, he is not willing to demand the reduction of tax rate on cryptocurrencies in the country to 20 percent due to the difficulty of numerous households investing in digital assets.
On June 2, the minister attended a meeting of the House of Councillors Committee on Financial Affairs, and answered a question by Japan Restoration Association member.
According to Aso, about 900 trillion yen (8.4 billion USD) of the 1900 trillion yen (17.6 billion USD) financial assets held by households in the country is currently being held as cash deposits and it is not normal.
Cryptocurrency was born in the country but numerous cash-based businesses and people still keep their savings liquid. Aso claimed that it would not be easy to convince investors in the country to invest into cryptocurrency; hence, there is no need to adjust the tax rate.
Japan classifies almost all cryptocurrency-related income from trading, mining, and lending as miscellaneous income on taxes, to a maximum tax of 55 percent. The tax on stocks in the country is 20 percent, and legislators who are crypto enthusiasts want the digital currency included.
The country’s legislation on cryptocurrencies which was modified and became effective on May 1 stipulates the replacement of the term “virtual currency” with “crypto asset”. In the words of Aso, “crypto” sounds a bit shady so perhaps the use of the Japanese word for stablecoin (angō shisan) sounds more stable right, he asked.
They talked about the appropriateness of cutting the leverage capitalization for crypto margin trading to 2x. They lowered the leverage limit from 4x in the same regulations, which became effective on May 1.
According to the Financial Services Agency (FSA), reducing the leverage capitalization was best due to the volatility of cryptocurrency, referencing fallouts such as the crash in March.