The Japanese Liberal Democratic Party is promoting a reform of taxation on encryption currencies, proposing a separate tax of 20%.

According to the TechFlow news, on December 20th, Coinpost reported that Representative Akihisa Shiozaki, the head of the Web3 working group of the Liberal Democratic Party's Digital Society Promotion Headquarters, reported that the LDP's Policy Investigation Committee officially approved the 'Urgent Proposal to Convert encryption Assets into Assets Beneficial to the National Economy' on the 19th.

The report pointed out that under the current tax system, the income generated from encryption asset transactions is generally classified as miscellaneous income and subject to a comprehensive tax rate of up to 55% (including income tax and resident tax), which is more stringent than in other countries. The report also mentioned that the taxation of encryption assets is more severe than in other countries.

In view of the above points, as well as whether encryption assets should be considered as financial assets for public investment, the following points should be considered:

Change the profit and loss generated by encryption asset transactions to implement the "declaration and separation taxation" system at a tax rate of 20%.

Losses from the amount of encrypted assets are allowed to be carried forward and deducted (can be used in the next 3 years)

The 'Declaration Separation Taxation' system is also applicable to the trading of encryption asset derivatives.