Japan moves forward with tax and stimulus reforms
Key elements include changes to income tax, corporate taxes, and cryptocurrency taxation, with a proposed shift from a variable tax of up to 55% to a simplified 20% flat rate on digital assets.
The Japanese government has announced plans to move forward with a significant stimulus package and sweeping tax reforms, which are expected to gain approval before the end of 2024. Prime Minister Shigeru Ishiba pledged to engage in bipartisan talks to overhaul policies, including changes to income tax, corporate taxes, and cryptocurrency taxation. It marks a notable shift from the ruling party’s earlier stance on increasing taxes.
Cryptocurrency tax reforms are set to be a focal point, as current regulations impose a variable tax of up to 55% on transactions. The opposition party has proposed a more simplified 20% flat rate for digital assets. Additional measures under discussion include raising the tax-free income threshold, reducing fuel taxes, and temporarily slashing sales taxes to support economic recovery.
These reforms come amid growing interest in Japan’s digital assets market, which has shown promising growth. The Liberal Democratic Party, under Ishiba, is pushing these changes as part of efforts to recover from political losses and adapt to shifting voter sentiment following a contentious election in September.