Japanese financial watchdog suggested easing corporate tax rules for crypto and individual stock investors to accelerate the growth of Japan’s economy, Bloomberg reports. The move also aims to encourage the Japanese people to invest the $14.5 trillion they hold in cash and deposits into local Web3 businesses and stocks.
Japan Could Exempt Investors From Taxes on Crypto They Hold After Issuing Them
The Financial Services Agency (FSA), Japan’s top financial regulator, proposed tax breaks for crypto assets and equities. The proposal seeks to support Prime Minister Fumio Kishida’s attempts to facilitate the growth of Japan’s economy.
More specifically, the FSA suggested that companies should stop paying taxes for paper gains on cryptocurrencies that they hold after launching them. Furthermore, the financial watchdog also suggested tax breaks for individual investors.
The move comes as the FSA seeks to support Kishida’s new growth plan dubbed “New Capitalism”. As a part of this vision, Kishida has promised to double the wealth of Japanese households and spur the growth of local Web3 companies.
In addition, the FSA also believes that tax breaks could encourage individual investors in the country to utilize their savings in a more productive manner by investing them in stocks and local businesses. According to the Bank of Japan, the country’s households hold about 2 quadrillion yen ($14.5 trillion) in non-productive assets such as cash and deposits.
Earlier this year it was reported that Japanese people held $17 trillion in financial assets as of December last year, half of which was accumulated in cash and deposits, data shows. This was mainly due to the effects of the coronavirus pandemic, which kept consumers at home and curbed spending.
Crypto Activists Call For Tax Changes in Japan
The FSA’s new tax break proposal comes after requests by crypto lobbyists, who have been calling for changes to high corporate taxes which make it difficult to launch and grow crypto projects in Japan. As a result, numerous companies relocated to Singapore and other more crypto-friendly countries.
At the moment, “profit from cryptocurrency holdings, including unrealized gains, is subject to corporate tax of about 30%,” according to Bloomberg. Last week, the Tokenist reported that Japanese lawmakers are looking to review tax rules for crypto startups from 2023 and tax them only when they turn a profit.
Similarly, Japan’s neighbor South Korea also delayed taxation on cryptocurrencies by two more years to 2025 last month. The postponement came just months after S. Korea elected a new, crypto-friendly president, Yoon Suk-yeol.
This article originally appeared on The Tokenist
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