Two of Japan’s biggest crypto business groups have launched a joint bid to persuade the government to revise its crypto tax laws. Japanese law currently stipulates that crypto traders must pay levies of up to 55% on their profits.

However, a number of players in the sector – as some opposition MPs – have directly challenged the government to reform the rate of tax, usually drawing relatively evasive responses from the finance ministry.

But the new effort from the Japan Cryptoasset Business Association (JCBA) and the Japan Virtual and Crypto Asset Exchange Association (JVCEA – formerly the Japan Virtual Currency Trading Association), is attempting to change that. The parties have created a “Tax Review Subcommittee,” which they say will push for tax reform by 2022.

The organizations, per a press release, stopped short of calling for an outright reduction in tax rates, but instead argued for “fairness of taxes and consistency within the system,” ensuring “competitiveness” with overseas markets.

Japanese crypto tax law classifies crypto earnings as “other or miscellaneous income” – no matter whether tokens are accrued from trading, mining or lending. Rather than using a flax tax rate, “other income” is subject to a sliding tax rate that can rise up to 55% in the case of the highest tax band earners.

In many other nations, such as the UK and the USA, crypto tax mainly takes the form of capital gains levies of crypto converted to fiat.

The two organizations spoke of the need to “compare” Japan’s system “with the tax systems of other countries,” and claimed surveys showed that there was popular support for the idea of “creating a system that is not inferior to” other nations.

They wrote that “under the current tax system, profits from cryptoassets are not taxed at a uniform tax rate, and loss carryforward from a previous year is not permitted” – factors that “hinders the promotion of proper and proactive filing” patterns among the Japanese crypto community.

In addition to some of the country’s largest crypto trading platforms, including TaoTaobitFlyerBitBankRakuten WalletCoincheck the Line crypto subsidiary LVC and Huobi Japan, a number of powerful non-crypto firms have also put their names behind the movement, including Deloitte Touche Tohmatsu and a number of legal and auditing firms. The latter group includes PwC Aarata.

The organizations stated that their mission would be “proposing concrete proposals for tax reform requests.”

(Photo: FortuneZ)

Credit: Source link