A Japanese policy task force focusing on NFTs has asked the government to consider the appointment of a Web3 minister to handle all Web3-related matters.
A Japanese policy task force has asked the country’s leaders to appoint a Web3 minister who will handle all matters pertaining to Web 3. The task force, known as NFT Policy Review Project Team, is under Japan’s ruling party, the Liberal Democratic Party (LDP), and chaired by Masaaki Taira, a member of the House of Representatives.
The request was included in an NFT white paper approved by the subcommittee and released on March 30. However, the drafting of the white paper began around February after Mr. Taira received a favorable response from several ministers who were concerned about Web3, including crypto assets, blockchain, and NFTs.
Developing a Support Structure for Japan’s NFT Sector
The call to appoint a Web3 minister to oversee all matters related to Web3 is part of a move to develop a support structure for Japan’s NFT industry. In the white paper, the government-appointed task force explicitly states that it wants Japan to play a significant role in the Web 3 era.
Along with the call for a Web3 minister, the task force recommends Japanese authorities to develop the infrastructure and regulatory framework to support the country’s NFT sector. The LDP also implies the development of a policy establishing rules for returning profits earned from the secondary distribution of NFTs. As per the task force, this would allow the management of virtual currencies in escrow services under specific conditions. The team also pushes for creating “a cross-ministerial consultation desk.”
The task force’s white paper calls Web3 “a new frontier of the digital economy,” with NFT positioned as the detonator. It advocates developing the above mentioned social infrastructure and rules to push innovation in the Web3 era. Moreover, the support structure will help promote the NFT sector as the new capitalist growth strategy’s pillar.
Prioritizing Consumer Safety and Addressing Token Tax Issues
The LDP acknowledges the issuance and sale of unlicensed NFTs as an ongoing problem, hence, the need for a support structure to ensure consumer safety. The white paper emphasizes that the government must prioritize consumer safety.
The white paper cites that the government must make the first move in helping Japanese businesses establish an industry-wide standard regarding the Metaverse. It appears the country lags behind other countries when it comes to it because of statutory regulations and excessive taxation.
It seems cryptocurrency transactions are considered miscellaneous income, thereby levying up to 55% income tax. The white paper hopes that such transactions be dealt with the same way as listed stocks; thus, there will be separate taxation at 20%.
The team’s white paper tackles the blockchain itself, particularly the issue of market value taxation on tokens. According to the white paper, a revision of the tax system and a review of its handling are imperative. It also calls on the easing up of assessments and examinations when issuing a new virtual currency.
In the present scheme of things, if a corporation holds a virtual currency until the end of the current fiscal year, a valuation gain will be recorded and added to the income, especially if the virtual currency’s market price is higher than its price when it was acquired. Such has prompted the outflow of many promising startup Web 3 companies overseas.
The NFT team included this issue in its white paper after Sota Watanabe, Chief Executive Officer of Japanese brick blockchain Astar Network (ASTR), raised concerns. There is hope that the support structure would encourage startups to stay in the country rather than bring their businesses overseas.
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