Japan's DPP Leader Proposes 20% Tax Cap on Crypto Earnings Ahead of General Elections

The promise comes as part of the party's campaign ahead of the October 27 general election, where it hopes to gain traction among crypto-friendly voters.

Yuichiro Tamaki, the leader of Japan's Democratic People's Party (DPP), has announced a bold policy proposal to cap taxes on cryptocurrency earnings at 20%. The announcement is part of the party's campaign ahead of the October 27 general election, where it hopes to gain traction among crypto-friendly voters.

Currently, cryptocurrency earnings in Japan are classified as miscellaneous income and can be taxed at rates as high as 55%. Tamaki's proposal would drastically reduce this tax burden, bringing it closer to the flat 20% rate applied to stocks and other financial assets. Additionally, the proposal includes tax exemptions for crypto-to-crypto exchanges to facilitate smoother trading activity.

"If you believe cryptocurrency should be taxed at a flat 20% rate instead of miscellaneous income, please vote Democratic for the People," Tamaki stated in a message posted on X.

Emphasizing the broader goal, he added, "Japan should aim to become a major cryptocurrency nation through deregulation and tax reform."

Tamaki's policy presentation outlines further measures to revitalize Japan's crypto market, including:

According to Daiki Moriyama, director of blockchain startup Oasys, the low leverage cap of 2x in Japan discourages speculators from entering the market. This, in turn, contributes to the low trading volumes on Japanese crypto exchanges, which ultimately affects their profitability.

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