Japan’s finance ministry has reportedly leveraged 80 tons of gold to help fund part of its huge stimulus package aimed at combating the coronavirus crisis. The Asian country, which is saddled with public debt twice the size of its economy, is under pressure to find non-tax revenues to cover the rising cost of spending to deal with the health crisis.
The Covid-19-induced recession has seen Japan’s tax revenues drop, leaving a significant hole in its budget. According to a report, before this “rare arrangement,” Japan’s finance ministry would normally “tap reserves set aside as special accounts, and profits the Bank of Japan (BOJ) and other agencies return to state coffers after they close their annual books.”
However, this year’s recession has forced the ministry to enter into an arrangement that involves the BOJ as well. Explaining how the deal was carried out, the report says:
The ministry’s division in charge of international affairs sold a portion of dollar reserves to the BOJ. With the yen it received, the division bought gold from another division of the ministry in charge of debt management.
Meanwhile, the report quotes two anonymous individuals who reveal that from the gold sale, the ministry’s “division in charge of debt management gained proceeds worth $4.84 billion (500 billion yen).” The individuals add that these proceeds will “finance a new fund aimed at boosting research and development at universities.”
In the meantime, the BOJ announced on the same day that “it would buy dollars from the ministry as a precaution against any market disruptions caused by the pandemic.” According to the analysts interviewed, Japan may have resorted to this approach because it “wanted to avoid issuing too much debt or using taxpayers’ money for the fund.”
What do you think of Japan’s decision to leverage gold? Share your views in the comments section below.
The post Japan Leverages 80 Tons of Gold to Help Fund Part of Its Stimulus Package appeared first on Bitcoin News.
A resident of the Altai Republic, a subject of the Russian Federation, has for the first time declared income obtained through purchases and sales of cryptocurrency, the Federal Tax Service reported on its website. The announcement is based on results from this year’s tax collecting campaign, the authority noted.
The question that many in the Russian crypto community are still asking is what the special crypto tax rules would look like. That should be decided by the Council of Ministers and the Central Bank of Russia (CBR) before July, 2018, as requested by President Putin. Officials have made different proposals but the ultimate decision depends on the legal of cryptocurrencies, which has yet to be determined.
As a preliminary estimate, Russia has all the prerequisites to become a crypto-friendly jurisdiction, when it comes to taxation. Income tax in the country is only 13%. According to an earlier communication by the Finance Ministry, Russians are expected to pay the same flat rate on their crypto-related incomes. The recommendation was issued in response to an enquiry filed in October, last year.
The South African Revenue Service (SARS) announced on Friday that it expects everyone to declare cryptocurrency gains as part of their taxable income. “The onus is on taxpayers to declare all cryptocurrency-related taxable income in the tax year in which it is received or accrued. Failure to do so could result in interest and penalties.”
The agency explains that cryptocurrencies are not regarded by SARS as a currency for income tax purposes or Capital Gains Tax, rather they are regarded as “assets of an intangible nature.” And, that “Whilst not constituting cash,” income received or accrued from cryptocurrency transactions can be taxed on revenue account under “gross income”. When goods or services are exchanged for cryptocurrencies, transactions are regarded as a barter.