Cryptocurrency lobbying groups in Japan intend to lobby the Financial Services Agency (FSA) to relax crypto taxation on Japan’s domestic digital asset market. In addition, Japan’s most potent crypto lobbying organizations claim that high tax rates stifle business growth. It advocates for lower taxation to keep talent in the country.
As a result, professionals in the field are more likely to stay in their home country rather than seeking their fortune in a country with laxer tax laws. By lowering tax regulations, the action aims to improve the business climate for local digital asset companies. Lobbyists claim that the current tax rate of 30 to 55 percent makes it nearly impossible for blockchain companies and investors to succeed.
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FSA Urging the Regulator to Relax Crypto Taxation
The Japan Virtual and Cryptoassets Exchange Association (JVCEA), the country’s self-regulatory organization that monitors cryptocurrency listings, and the Japan Cryptoasset Business Association (JCBA), a platform that allows bitcoin (BTC)-linked businesses to network. Moreover, they address issues critical to the development of Japan’s crypto space. They are preparing to send a letter to the Financial Services Agency (FSA) urging the regulator to lower the current tax requirements for crypto assets.
According to people familiar with the situation, the Japanese government currently taxes cryptocurrency firms’ unrealized earnings at rates ranging from 30 to 55 percent. However, the Japan Cryptoasset Business Association (JCBA) and the Japan Virtual and Cryptoassets Exchange Association (JVCEA) have stated that such rules make it extremely difficult for companies to preserve their digital assets once they have been issued. Moreover, it discourages other entrepreneurs from launching new currencies.
Increased Crypto Adoption
The Japan Crypto Asset Business Association and the Japan Virtual and Crypto Assets Exchange Association are working on a plan. Both organizations are fighting to lower the entry barrier. It’s for both average people who store or trade bitcoin (BTC) and other digital currencies in the region. Moreover, it also focuses on Japanese crypto businesses looking to issue their altcoins.
According to reports, the organization intends to request that the FSA refrain from taxing unrealized gains on cryptocurrency holdings. That’s only if businesses hold these digital assets for reasons other than short-term trading. The JCBA and JVCEA will submit the proposal by the end of this week. The organization also wants the government to reduce the existing income tax on individual cryptocurrency investors, reaching up to 55% in some cases to 20%.
Japan’s Cryptocurrency Regulations
Japan was the first country to propose a regulatory framework to govern cryptocurrency. Japan recognized cryptocurrencies as legal tender as early as April 2017. Following the Coincheck breach, Japan’s watchdog FSA increased cryptocurrency exchange regulations in 2019.
It was one of the largest hacks at the time, with nearly $500 million in cryptocurrency stolen. Since then, all cryptocurrency exchange companies must adhere to the country’s anti-money laundering (AML) and counter-financial-terrorism (CFT) regulations.
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Source: https://insidebitcoins.com/news/japanese-crypto-lobbyists-call-on-authorities-to-relax-crypto-taxation