Japan: Finance Minister Taro Aso does not like to push for lowering the tax rate on cryptocurrencies to a flat 20%

Finance Minister Taro Aso suggested he was unwilling to push for lowering the tax rate on cryptocurrencies in Japan to a flat 20% because it’s difficult for many households to invest in digital assets, according to Japan Restoration Association member Shun Otokita on June 2.

Taro Aso said: “Out of 1900 trillion yen [17.6 billion USD] financial assets held by households in Japan, around 900 trillion yen [8.4 billion USD] is now being held as cash deposits and that is abnormal,”.

In Japan, nearly all cryptocurrency-related income — from trading, mining, and lending — is classified as miscellaneous income on taxes, subject to a rate up to 55%. However, the country taxes stocks at a flat rate of 20%, something pro-crypto legislators have been pushing to include digital currency.

On May 1st, 2020, Japan’s new crypto-asset regulations, promulgated in April 2019, officially finally come into effect. The new legislation that amends Japan’s Payment Services Act (PSA) and Financial Instruments and Exchange Act (FIEA) will be enforced by Japan’s leading financial regulator, the Financial Services Agency (FSA).

The Payment Services Act (PSA) of Japan requires virtual currency exchange platforms (VCEPs) to register with the FSA for an operating license since April 2017.

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