Bitcoin Tax Regulated in Japan
Bitcoin Trades taxed by Japan
Japan welcomes Cryptocurrency in their country. It has accepted Bitcoin as a legal commodity in their nation whereas people are free to use this cryptocurrency in every transaction they make whether they exchange it for goods or use it as payment for their financial obligations or send funds to another person. Bitcoin has been accepted in many countries as a virtual currency and many individuals and business owners are embracing it for their financial transactions. In Japan, however, the government regulated tax in every Bitcoin trades. This is after the collapsed of Mt. Gox which was the largest Bitcoin exchange in the world.
Bitcoin Tax – 3 Reasons Why it is Debatable
Bitcoin Tax Debatable Reason # 1 – Japan is the only one among top 7 industrialized countries to tax Bitcoin
Liberal Democratic Party member Tsukasa Akimoto questioned Taro Aso, the Finance Minister about the imposed tax. The ruling party member asks if they can consider not imposing the trade tax just like the worldwide trend. To this, Mr. Aso replied that there are other countries that are imposing tax, pointing to Australia who taxes other Cryptocurrency. This discussion happened February 5 during the meeting of the lower house budget committee.
Bitcoin Tax Debatable Reason #2 – Puts consumers and dealers into a bad state
The tax imposed for Bitcoin trade is similar to tax imposed on physical goods which is 8%. This is high enough for the consumers and entrepreneurs to not use the said Cryptocurrency. As Nikkei quoted Yuko Kano, the chief of Japan Authority of Digital Assets said that:
“Japan is going against the world. The taxation is bad for Japan in terms of its competitiveness. We need a level playing field that lets Japanese dealers compete fairly with outsiders.”
Bitcoin Tax Debatable Reason #3 – Should be treated as a legitimate currency and not just a commodity
On January 26th, this year, CoinTelegraph wrote an article that sought after cryptocurrencies to be acknowledge as a legitimate currency. Taxing Bitcoin is like saying that it is just another common goods and cannot be legalize as a true currency.
Though Japan welcome Fintech, they still treated cryptocurrency as an object and therefore it should still be taxed. However, the electronic money is exempted with the said tax since there is a tendency that it will be used for paying of services, goods and others as a substitute to conventional currencies.
This coming May, the Group of Seven summit will be hosted by Japan. It is predicted that the major topic of the event will be about the fintech or financial technology. Whereas, the group will be preparing proactively with the booming of fintech all over the world and this involves Cryptocurrency. Mr. Aso, the Finance Minister confirmed that he will do his best to build an environment that can facilitate the ongoing fintech innovation in their country. Many have high hope that throwing off the tax that was imposed with trades would be the best beginning.