Japanese political parties are advocating for reforms to crypto tax regulations as national elections approach on October 27. Yuichiro Tamaki, leader of the Democratic Party for the People, is appealing to voters by proposing clear tax cuts, stating that crypto assets should be taxed at a separate rate of 20%, rather than as miscellaneous income. The current regime has drawn criticism for taxing crypto profits as income, with rates as high as 45% for high earners, in contrast to a flat 20% on capital gains from securities. Meanwhile, the Liberal Democratic Party, now led by Prime Minister Shigeru Ishiba, also supports tax reforms and the promotion of web3 technologies. The second-largest party, the Constitutional Democratic Party, expresses intentions to review the crypto tax system as part of its web3 development strategy. Discussions regarding digital currencies, including central bank digital currencies (CBDCs), are also underway. Overall, these reforms aim to foster innovation and mitigate the burden on crypto investors amid Japan's evolving financial landscape.

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