Japan’s Financial Services Agency (FSA) is proposing to ease corporate tax rules pertaining to cryptocurrency assets and reduced levies for individual stock investors in order to support the country’s Prime Minister’s efforts to revitalise the economy.
According to Bloomberg, the regulator said during its yearly tax-code change request recently that companies should be exempt from paying taxes for paper gains on cryptocurrencies which they are holding, after issuing them.
Furthermore, the FSA also advocated for the boosting of a programme that provides individual investors with tax breaks.
These actions are in support of Prime Minister Fumio Kishida’s idea of ‘New Capitalism,’ which aims to strengthen the economy of the world’s third-largest economy.
Additionally, he also pledged to double the wealth of households while at the same time offering support to develop Japan’s so-called Web3 businesses.
Bloomberg reports that crypto lobbying groups have been advocating for changes, stating that high corporate taxes have raised the bar for establishing projects in the country, resulting in some companies to take their operations to Singapore and other countries.
At present time, a corporate tax rate of approximately 30% applies to profits made from cryptocurrency ownership, including unrealised gains.
With regards the retail investors, the FSA aims to expand the initiative called the Nippon Individual Savings Account (NISA) through raising its investment limits and changing it into a permanent programme.
Under the NISA programme, investors could have some of their investment gains and dividends be exempt from paying capital gains tax over a certain period of time.
This move marks Japan’s latest effort in recent years to encourage individuals to put their savings to use in positive ways such as investing in equities for the benefit of the economy as a whole.
According to data from the Bank of Japan, Japanese households keep approximately ¥2 quadrillion (RM64.53 trillion) worth of financial assets in cash and deposits.
After reviewing the recommendations from government offices, the tax panel of the Liberal Democratic Party, which is in power in Japan, would make the decisions before the end of the year.
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