Japan’s Democratic Party Leader Pledges 20% Crypto Tax Cap if Elected  

• DPP’s Tamaki proposes cutting crypto tax to 20%, aligning it with stock market taxes.
• No tax will be applied to crypto-asset exchanges under the DPP leader’s proposed tax plan.
• Tamaki’s DPP seeks to boost Japan’s Web3 business through tax reforms, targeting crypto investors.

Yuichiro Tamaki, leader of Japan’s Democratic Party for the People (DPP), has put forward a proposal to significantly lower taxes on cryptocurrency gains if elected. Tamaki’s plan aims to reduce the tax rate on crypto profits to 20%, aligning it with the rate applied to stock market earnings in the country. 

Currently, cryptocurrency gains in Japan are taxed as miscellaneous income, with rates ranging from 15% to 55%, depending on the individual’s income.

In a post shared on the social media platform X on October 20, Tamaki urged voters to support his party’s push for crypto tax reforms, stating, “If you think crypto assets should be taxed separately at 20% instead of treated as miscellaneous income, please vote for the Democratic Party for the People.” His plan is a core part of the DPP’s broader strategy to position Japan as a leading nation in the Web3 space.

Significantly, Tamaki’s proposal also includes a key feature: no taxes would be imposed when exchanging one cryptocurrency for another. This aspect of the plan could reduce tax burdens for crypto traders, simplifying transactions within Japan’s growing digital economy.

Despite the ambitious tax reform proposal, the Democratic Party for the People currently holds only seven out of 465 seats in Japan’s House of Representatives. According to a recent survey by the Mainichi news outlet, the DPP is unlikely to win the upcoming election on October 27, though they may expand their presence in the lower house.

Currently, Japan’s Financial Services Agency is preparing a comprehensive overhaul of the country’s tax system, including provisions that could potentially lower taxes on crypto assets by 2025. This gives additional context to the broader discussions surrounding crypto regulation in Japan, although Tamaki’s party is focused on more immediate changes.

If enacted, the DPP’s proposed 20% tax cap on crypto gains would benefit individual investors significantly, particularly those in higher income brackets currently paying up to 55%. However, Tamaki’s ability to see this plan through remains uncertain as the ruling Liberal Democratic Party is expected to retain its majority in the upcoming election.