Japan’s FSA offers tax breaks for investors as country’s cash savings hit $14.5 billion – 24/7 Wall St.

Japan’s financial watchdog has suggested easing corporate tax rules for crypto and individual stock investors to accelerate the growth of the Japanese economy, Bloomberg reports. The move is also intended to encourage Japanese people to invest the $14.5 trillion they hold in cash and deposits in local Web3 companies and stocks.

Japan Could Exempt Investors From Taxes On Crypto They Hold After Issuing Them

The Financial Services Agency (FSA), Japan’s main financial regulator, has offered tax breaks for crypto-assets and stocks. The proposal aims to support Prime Minister Fumio Kishida’s attempts to facilitate the growth of the Japanese economy.

Specifically, the FSA has suggested companies stop paying tax on paper earnings on cryptocurrencies they hold after launch. Additionally, the financial watchdog has also suggested tax breaks for individual investors.

The move comes as the FSA seeks to back Kishida’s new growth plan dubbed ‘New Capitalism’. As part of this vision, Kishida promised to double the wealth of Japanese households and stimulate the growth of local Web3 businesses.

Additionally, the FSA also believes that the tax breaks could encourage individual investors in the country to use their savings more productively by investing them in local stocks and businesses. According to the Bank of Japan, households in the country hold about 2 quadrillion yen ($14.5 trillion) in non-performing assets such as cash and deposits.

Earlier this year, it was reported that the Japanese held $17 trillion in financial assets as of December last year, half of which was accumulated in cash and deposits, the data showed. This was mainly due to the effects of the coronavirus pandemic, which kept consumers at home and dampened spending.

Crypto Activists Call for Tax Changes in Japan

The FSA’s new tax relief proposal follows demands from crypto lobbyists, who have called for changes to high corporate taxes, which make it difficult to launch and grow crypto projects in Japan. As a result, many companies have moved to Singapore and other more crypto-friendly countries.

Currently, “profits from cryptocurrency holdings, including unrealized capital gains, are subject to corporate tax of approximately 30%,” according to Bloomberg. Last week, the Tokenist reported that Japanese lawmakers are considering revising tax rules for crypto startups from 2023 and only taxing them when they make a profit.

Similarly, Japan’s neighbor South Korea also delayed taxing cryptocurrencies for another two years until 2025 last month. The postponement came just months after South Korea elected a new crypto-friendly president, Yoon Suk-yeol.

This article originally appeared on The Tokenist

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