Japan’s Finance Minister, Katsunobu Kato, has announced that the government will review the country’s crypto tax laws by June 2025. This decision comes in response to concerns about the current tax regulations for crypto traders in Japan.
According to Iolite, Kato made the announcement during a session of the House of Representatives on January 31, 2025. He stated that the Financial Services Agency (FSA) will lead the review, with proposals from the ruling Liberal Democratic Party (LDP) on potential changes to the tax system. The review will likely involve recommendations for legislative amendments.
“We are discussing the matter in line with the 2025 Tax Reform Outline, and are considering the necessary legal arrangements. The Financial Services Agency will verify the system regarding crypto assets by June of this year,” said Kato.
Prime Minister Shigeru Ishiba also emphasized the importance of the healthy development of Web 3.0 technologies, including cryptocurrencies. Ishiba believes that crypto assets have the potential to address social issues in Japan and improve productivity. He also acknowledged the need for the government to protect users and improve the environment for domestic crypto markets.
One of the challenges with Japan’s current crypto tax laws is that traders are required to report their trading profits as part of their annual income tax returns, resulting in high tax rates. Critics argue that these high taxes have hindered the growth of the crypto sector in Japan.
The Finance Ministry and FSA are considering amending the Payment Services Act to include crypto as an asset class under the Financial Instruments and Exchange Act. This potential change could align Japan’s regulations and taxation of cryptocurrencies with international standards.
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