Proposal to Tax Cryptocurrency Gains at 20% by DPP Leader Yuichiro Tamaki

Yuichiro Tamaki, the leader of Japan’s Democratic Party for the People (DPP), has proposed a plan to reduce the tax on crypto gains to 20% as part of his policy statement for the upcoming general election.

> "If you believe that cryptocurrency should be taxed at a flat 20% rate, instead of being treated as miscellaneous income, please vote for the Democratic Party for the People. We also propose no taxes on cryptocurrency-to-cryptocurrency exchanges," Tamaki wrote on X on Sunday.

In a policy statement, the party suggests a 20% separate self-assessed tax and proposes exempting taxes on cryptocurrency exchanges, raising the leverage limit from 2x to 10x, and introducing crypto ETFs. Tamaki also mentioned in a previous X post that Japan should “aim to become a major cryptocurrency nation through deregulation and tax reform.”

> "With the leverage ratio for retail investors limited to 2x, there is little incentive for speculators to enter the market," said Daiki Moriyama, director of Japan- and Singapore-based gaming blockchain builder Oasys.

Currently, Japan imposes taxes of up to 55% on crypto gains, classifying cryptocurrency as miscellaneous income. In December, the government approved a tax regime revision allowing corporations to avoid taxation on unrealized crypto gains if they hold the assets for the long term.

> "Cryptocurrency trading volumes in Japan remain extremely low," Moriyama added. "Consequently, Japanese cryptocurrency exchanges, which rely mainly on trading fees as their primary source of revenue, are struggling to generate profits."

Tamaki’s ambition to reform crypto taxes may still be far from becoming a reality, as the DPP currently holds seven seats in the House of Representatives. Japan is set to hold a general election on Oct. 27 to fill its 465 lower house seats.

A recent survey conducted by the Asahi Shimbun, a major Japanese newspaper, indicated that in single-seat areas, the DPP may double its pre-election total of four seats. In the proportional representation category, the DPP may increase its overall seats as well.