The Japanese government is discussing the possibility of switching from progressive tax rate on cryptocurrency capital gains to a uniform one.

Deputy Prime Minister of Japan Taro Aso proposed to change the way cryptocurrency profits are taxed, opting out of a progressive tax rate to a uniform one. Currently, operations with crypto currency in Japan are subject to the tax on capital gains, that varies from 5% to 45% depending on the volume of income. In addition, in various prefectures and municipalities, these incomes are subject to additional taxation at a rate of 10%. Thus, the maximum tax rate on capital gains from operations with cryptocurrencies can reach 55%.

"The profits gained by virtual currency transactions should be changed from current ‘miscellaneous income’ to ‘declaration separate taxation,’" the Japanese Deputy Prime Minister and Minister of Finance, Taro Aso, said at the Upper House budget committee meeting on 25 June.

The tax for “miscellaneous income” is determined according to the amount combined of these revenues together with other profits, such as salary income. But if the tax rate is switched to a uniform one, as it is done with income from operations with certain types of securities, the tax rate will decrease to 20.315%, with 15.315% being a flat rate for all residents of Japan, and 5% being a municipal tax.

The current system of taxation of cryptocurrency capital gains in Japan has been severely criticized. A petition against this system, posted on Change.org, was signed by 11,786 persons.

Earlier, it was reported that more than 330 major taxpayers in Japan with revenues of more than 100 million yen ($914,000) declared income from operations with cryptocurrencies.