Bitcoin News Today: Japan Adults Eager to Boost Crypto Purchases with 20% Tax Rate

Most Japanese adults expressed a willingness to increase their Bitcoin (BTC), Ethereum (ETH), and altcoin purchases if the government implements reforms to the nation’s stringent crypto tax regulations. This insight was derived from a survey conducted in April, which involved 1,500 adults and was commissioned by the Japan Blockchain Association (JBA).

The survey revealed that 13% of respondents currently own BTC or other cryptoassets. When asked if they would buy more crypto if the government introduced a flat 20% tax rate on crypto profits, 84% of the respondents who already hold crypto answered affirmatively. Additionally, 12% of those who do not currently hold any cryptoassets indicated they would start investing if such tax reforms were implemented.

The JBA suggested that the survey results indicate that tax reforms could significantly boost the trading volumes of domestic exchanges. Currently, Japanese investors must report their crypto-related profits under the “other income” category on their income tax returns, which can result in tax rates as high as 55% depending on their tax brackets. In contrast, many other countries apply a flat capital gains tax rate of 10-20% on crypto profits after a certain threshold.

Advocates for reform are pushing for Tokyo to adopt a flat 20% capital gains tax on crypto profits, replacing the current income tax laws. This proposal is supported by the JBA and key members of the ruling Liberal Democratic Party, as well as opposition lawmakers. However, the final decision rests with the regulatory Financial Services Agency (FSA), which has thus far seen all its recommendations to the Cabinet become law.

The JBA emphasized that cryptoassets are transitioning from being a means of payment to a means of asset accumulation, aligning with the FSA’s plans to reclassify crypto as an investment vehicle. The industry body is intensifying its efforts to persuade Tokyo to approve tax reform starting next year. The JBA comprises some of the nation’s largest crypto exchanges and blockchain firms.

On July 18, the JBA submitted a petition to the FSA calling for the approval of tax reform for crypto profits. The survey, conducted on April 24 and 25, included respondents aged 20 to 69, with an average age of 38. The respondents were 60% male and 40% female. Additionally, 75% of respondents preferred tax bodies to withdraw their payable taxes at source rather than requiring separate tax declarations. The JBA also proposed allowing crypto traders to choose between paying taxes at the point of sale or after filing declarations.

The survey also explored why respondents who do not currently hold any cryptoassets have not invested yet. Eight percent cited high tax levels as a deterrent, while 61% indicated a lack of sufficient understanding of crypto. Most respondents were employed in the private sector, with students and unemployed individuals also participating in the survey.