Japan now makes a surprising announcement to lower its crypto tax from 55% down to 20%, a plan that may take place by 2025.
Japan’s financial regulator has announced plans for a significant overhaul of the tax code for fiscal year 2025, which includes provisions for cryptocurrencies that could reduce their tax rates.
In a request for tax reform dated August 30, Japan’s Financial Services Agency (FSA) emphasized the need to classify cryptocurrencies as traditional financial assets available for public investment.
The FSA stated, “Cryptocurrency should be treated as a financial asset that is an investment target for the public,” urging a reevaluation of its tax treatment.
Currently, profits from cryptocurrencies in Japan are taxed as miscellaneous income, with rates ranging from 15% to 55%.
The highest rate of 55% applies to earnings exceeding 200,000 Japanese yen (approximately $1,377), depending on the taxpayer’s income bracket.
In contrast, profits from stock trading are taxed at a maximum rate of 20%.
For corporate holders of cryptocurrencies, a flat tax rate of 30% is imposed on their holdings at the end of the fiscal year, regardless of whether they have realized any profits through sales.
Tax reform requests are submitted by government ministries to the ruling party, which then forwards them to a tax system research committee and the national legislature for consideration.
For the reform to become law, it must be approved by both houses of the Japanese government: the House of Representatives and the House of Councilors.
Advocates for the crypto industry in Japan have long sought changes to the national tax policy for digital assets.
The Japan Blockchain Association, a pro-crypto lobbying group, formally requested a reduction in the tax rate on cryptocurrencies in 2023.
On July 19, the association submitted another proposal for tax reform for the 2025 fiscal year, aiming to encourage growth in the nation’s crypto sector.
Their suggestions included a flat 20% tax rate for cryptocurrencies and allowing a three-year loss carryover deduction.
Despite these initiatives, there have been no significant policy changes for the crypto industry in Japan to date.
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Also Read: Analyst Now Says A Massive Bitcoin Short Squeeze is Coming
Other Crypto News Today
An Asset Manager now makes a 2050 Bitcoin prediction of a whopping $2.9m per coin, with lows still looking rather promising.
VanEck has forecasted that by 2050, Bitcoin could potentially become a global reserve currency with a price reaching $2.9 million.
This transition is expected to stem from a decreasing trust in traditional reserve assets and a growing demand for alternatives like Bitcoin.
The firm believes issues related to Bitcoin’s scalability will be addressed through Layer-2 (L2) solutions, enhancing its efficiency.
VanEck predicts that by 2050, Bitcoin could facilitate 10% of international trade and 5% of domestic transactions, with central banks possibly holding 2.5% of their assets in Bitcoin.
Overall, VanEck envisions a significant role for Bitcoin in both international and domestic trade by that year.
According to their estimates, if Bitcoin achieves this scenario, it could drive its price to $2.9 million, elevating its market capitalization to around $61 trillion.
Additionally, VanEck anticipates that the value of Bitcoin’s Layer-2 solutions could reach $7.6 trillion, representing about 12% of Bitcoin’s total value.
It’s important to note that VanEck’s $2.9 million estimate is considered a “base case.”
In a best-case scenario, Bitcoin could soar to $52,386,207, while in a worst-case scenario, the price could drop to $130,314.
A key factor behind VanEck’s optimistic view is Bitcoin’s potential as a reserve asset.
They suggest that shifting trends in the International Monetary System (IMS) could facilitate this transition.
With major economies like the US, EU, UK, and Japan seeing a declining share of global GDP, there may be a growing move toward alternative reserve assets.
This shift is further fueled by diminishing confidence in traditional reserve currencies due to concerns over deficit spending and geopolitical instability.
Consequently, businesses and consumers might increasingly see Bitcoin as a stable and neutral medium of exchange, appreciated for its predictable monetary policy and secure property rights.
VanEck argues that these economic changes could accelerate Bitcoin’s adoption as a global reserve currency, addressing the shortcomings of conventional fiat currencies.
However, not everyone agrees with VanEck’s bullish outlook.
Crypto commentator Kal Benz has labeled the $2.9 million forecast as “bearish.”
Given that Bitcoin currently trades around $59,000, a price of $2.9 million implies an extraordinary growth of 4,815%.
Adjusted for 5% inflation, this projection would be equivalent to $856,000 today, representing a 10.7% return on investment (ROI).
When considering 5% annual monetary debasement, the value shrinks to $267,000, or a 6% ROI.
Furthermore, some market participants are expressing caution, highlighting potential risks.
A notable crypto trader has even predicted that Bitcoin’s value could plummet to as low as $16,000 if Vice President Kamala Harris wins the presidency in November, citing worries about the current administration’s regulatory approach to cryptocurrencies.
Also Read: Here Is What Experts Are Now Saying About Bitcoin’s Plunge
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