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Japan Prime Minister Shigeru Ishiba promises to include discussions of tax cut proposals from the opposition party in his economic stimulus package, involving tax cuts for gasoline and crypto assets.
According to a Bloomberg report published on Nov. 20, Ishiba received the green light for his economic stimulus package after vowing to include annual tax reform proposals from the opposition party, the Democratic Party for the People.
The main parties also agreed to raise the budget to fund the stimulus package by the end of December. The economic stimulus package is scheduled to come out this week.
Makoto Hamaguchi, a senior official in Japan’s DPP, said his party’s proposal includes an annual tax reform for the next fiscal year which would include raising tax-free income from 1.03 million yen ($6,650) to 1.78 million yen ($11,435) and to carry out several tax cuts.
The DPP is asking the ruling party to consider cutting sales tax rates to 5% temporarily until wages increase by 2%. The party is also proposing tax cuts for companies that raise salaries, investment in developing industries such as semi-conductors and artificial intelligence, and profits gained from crypto assets.
“That’s progress for us. We have no intention to waver on our goal to raise it to 1.78 million yen,” said Hamaguchi, adding that Japan’s tax-free income bar has not moved in the past 30 years. His party is determined to change that.
Hamaguchi stated that the DPP aims to finish these tax reform discussions by the end of this year.
In their policy statement, the DPP proposed taxing crypto gains by 20%, a move that would place virtual assets on the same level as taxes on profits accumulated from the stock market. Under current Japanese regulations, crypto falls under “miscellaneous income” which means Japan’s crypto tax could reach up to 55% depending on personal income.
Meanwhile, profits earned from stock trading receive a maximum tax rate of 20% under Japanese law.
A minor opposition party in Japan, the DPP generated enough votes from the nation’s election in October to hold influence in the current chamber. So far, the party has maintained a strong hold on debating against the ruling party on proposed policies on a case-by-case basis, acting as a power balance to the incumbent whilst pushing their own policy proposals forward.
One of the main points within the DPP’s policy statement pre-election was “supporting token economy using crypto assets.” The party vowed to utilize non-fungible tokens as well as cryptocurrency to boost Japan’s economy if it gets elected.
On the other hand, support for crypto and blockchain technology can also be found within the ruling party’s figureheads.
After his win on Oct. 1, President of the Liberal Democratic Party Shigeru Ishiba’s policy document indicated that he wants to use blockchain technology and NFTs to boost Japan’s economy.
Masaaki Taira, the current chief of LDP’s Web3 task force and Minister of Digital Affairs proposed to apply Japanese intellectual property laws to NFTs. He is also in favor of boosting crypto startups by reforming Japan’s tax system.