A lot of changes have been proposed by the Japanese lawmaker in the current taxation regime for easing the burden of crypto currency users and encouraging the adoption of crypto currency in the country.
Earlier this month in a meeting, Nippon Ishin’s Takeshi Fujimaki said that the tax system of the country must not be such that it crushes the blockchain and digital currencies’ future. In order to rectify that, four amendments were recommended for promotion of the virtual currency in the society.
Takeshi’s suggestions included separation of tax rate on the crypto gains which must be 20% instead of the present 55% as the gains from crypto currency traders and not very stable as in case of salary income and there are also chances that losses may be incurred. So the crypto currency gains must be taxed on par as the other investment options like mutual funds and stocks.
Further, the crypto currency losses should also be allowed to be carried forward to create a fair system. Currently, no allowance is provided for losses and taxes are charged on the gains. The taxpayers must be allowed to deduct the losses before paying taxes.
Thirdly, a tax exemption must be provided to those who trade between two virtual currencies. Takeshi added,
In order to increase the volume of transactions between virtual currencies and to revitalize the virtual currency market, trading between virtual currencies should be tax exempt.
Lastly, for increasing small payments in the virtual currencies, there should be a provision of tax exemption in that area as well. However, this may have an adverse effect on the use of crypto payments.
Takeshi has raised the issue of crypto taxation before as well. He has given several suggestions for classifying the crypto currency tax policy into separate declared taxation.
Source: Coin Desk and Cryptocoin Growth