Japanese cryptocurrency traders who aren’t reporting their income for tax purposes will be hunted down. According to The Asahi Shimbun, the government is about to start watching carefully for large cryptocurrency trades to ensure they get their share in taxes.
Their sources say that as many as 50 traders and 30 businesses failed to report as much as 10 billion yen ($93 million) in cryptocurrency income over the past several years. That’s enough for the government to sit up, take notice, and spend a little of its own money to start tracking trades, in the hopes that government coffers get a little fuller as a result.
They’ll specifically be tracking larger trades to ensure they result in tax declarations at the end of the year.
This has been building for some time. In December 2018, Japan gave the National Tax Agency (NTA) the power to gather information from cryptocurrency exchanges, specifically with the motivation to hunt down tax evading citizens. That move then permits the government to potentially increase its tax revenue from cryptocurrency, which most in government feel it has failed at considering the growth of the market, and their lack of growth in tax revenue.
Not everyone is looking to raise cryptocurrency taxes and hunt down tax evaders though. Takeshi Fujimaki, a Japanese member of parliament, proposed to relax taxation laws on cryptocurrency to help drive investment and grow the size of the market. His suggestion to cut the taxes that apply from 55% to 20%, the same amount common stocks are taxed at, were specifically designed during the crypto winter, when the market could have used it.
Now that the market is back on the rise, nobody is talking about cutting taxes. The Asahi Shimbun notes that the 55% tax is likely to still cause traders to avoid their taxes completely, but rather than consider a tax cut, Japanese officials are considering prosecuting those caught for tax avoidance, and penalize exchanges that refuse to share information on their tax-cheating customers.
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