Japanese lawmakers recently proposed an amendment that would classify digital currencies as legal tender. However, the taxation of digital currencies in the country remains a thorny issue.
According to a recent Nikkei Asian Review publication, Liberal Democratic Party member Tsukasa Akimoto, suggested that Japan must follow the example of other countries and make sure that digital currency transactions are not taxed excessively.
Akimoto asked Finance Minister Taro Aso:
“Can’t you consider not imposing consumption tax on bitcoins in line with the international trend?”
However, Aso believes that Japan should follow Australia’s lead, where virtual currency transactions are subject to a GST tax, “Japan is not alone” said Aso, in a lower house budget committee meeting on the 5th of February.
Japanese digital currency enthusiasts and entrepreneurs also share Akimoto’s sentiments. Yuzo Kano, Head of Japan Authority of Digital Assets (JADA), said that any taxation on digital currency purchases should abandoned, “The taxation is bad for Japan in terms of its competitiveness,” said Kano.
Under current legislation, virtual currencies are not granted the same tax-exempt status as traditional payment methods. Japanese law says that digital coins are considered objects and are thus subject to a consumption tax.
In May, the Group of Seven (G7) summit will be held in Japan – which will be attended by central bank governors and heads of state – and according to the Nikkei Asian Review, virtual currency taxation will be addressed.
“The promotion of fintech (financial technology) will be a common understanding among the heads of the state, which will in turn prompt talks in Japan to rethink the bitcoin taxation,”
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