Japan will go ahead with a proposed stimulus package after Prime Minister Shigeru Ishiba promised to engage in bipartisan discussions to enact sweeping tax reform. 

The economic stimulus package is expected to be approved before the end of 2024. According to a report from Bloomberg, the proposed tax reform measures include changes to income tax, corporate taxes and cryptocurrency taxes. This represents a shift in the governing party’s policy, which had previously called for higher taxes. 

Pundits have described the situation as being “stuck between a rock and a hard place.”

Japan passes stimulus package, commits to crypto tax reform image 0

Japanese writer Takeshi Suzuki describes the situation in a Nov. 8 post on X.com. Source: Takeshi Suzuki

Stimulus and relief

Japan’s current policy surrounding cryptocurrency taxes relies on a nebulous and variable “miscellaneous tax” which, reportedly, can apply as much as a 55% levy on transactions. The opposition party has called for a 20% flat taxation rate for digital assets alongside myriad other tax cuts. 

Other tax cuts planned for discussion include increasing the amount of income a citizen can earn tax-free from $6,650 to $11,345, cutting fuel taxes, and slashing sales taxes until the employment market recovers by at least 2%. 

Related: SEC approves Coincheck as first Japanese crypto exchange on Nasdaq

Cryptocurrency in Japan

Japan’s digital assets market has recently shown signs of maturation and growth, even as the country seeks to shore up its economy ahead of 2025. 

As Cointelegraph recently reported, prior to Ishiba’s election as prime minister in September, Democratic Party for the People leader Yuichiro Tamaki, considered a front-runner at the time, promised digital asset reform as part of his campaign’s pledge to make Japan a world leader in Web3 . 

While Tamaki’s defeat ensured the incumbent Liberal Democratic Party would remain in power, the tightly contested voter referendum demonstrated a shift in national politics. The incumbent party retained the top spot but lost 68 seats in the House of Representatives, likely prompting the renewed push toward bipartisan tax reform. 

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