Japanese Prime Minister Shigeru Ishiba has committed to incorporating opposition tax cut proposals in his upcoming economic stimulus package, including reductions for gasoline and crypto assets. According to a Bloomberg report on November 20, Ishiba secured approval for the stimulus package after agreeing to include reforms proposed by the Democratic Party for the People (DPP).
Both major parties have also agreed to increase the budget for the package, which is expected to be finalized by the end of December and released later this week.
Makoto Hamaguchi, a senior DPP official, stated that the party’s proposals for the next fiscal year include raising the tax-free income threshold from 1.03 million yen ($6,650) to 1.78 million yen ($11,435) and implementing various tax cuts. Among these are temporary sales tax reductions to 5% until wages rise by 2%, incentives for companies raising salaries, and tax breaks for investments in industries like semiconductors, AI, and crypto assets.
“We got confirmation that the ceiling, which didn’t move for 30 years, will move,” Hamaguchi said. “That’s progress for us. We have no intention to waver on our goal to raise it to ¥1.78 million.” The DPP aims to conclude tax reform discussions by year-end.
The DPP’s policy also includes taxing crypto gains at a flat 20%, aligning them with stock market profits. Currently, crypto falls under “miscellaneous income,” which can see tax rates as high as 55%, depending on individual earnings. By comparison, stock trading profits in Japan are capped at a 20% tax rate.
Although a minor opposition party, the DPP gained significant influence in the October elections and now plays a critical role in balancing power with the ruling Liberal Democratic Party (LDP).
Crypto support is strong across political lines. The DPP advocates for leveraging non-fungible tokens (NFTs) and cryptocurrencies to bolster Japan’s economy, a key promise during the election. Similarly, LDP leaders have shown interest in blockchain technology.
Prime Minister Ishiba’s policy agenda includes using blockchain and NFTs for economic growth. Masaaki Taira, head of the LDP’s Web3 task force and Minister of Digital Affairs, has proposed applying Japanese intellectual property laws to NFTs and reforming the tax system to support crypto startups.
