ID :
153386
Tue, 12/14/2010 - 07:33
Auther :
Shortlink :
https://www.oananews.org//node/153386
The shortlink copeid
Kan to seek 5 percentage point cut in Japan`s corporate tax
TOKYO, Dec. 13 Kyodo -
Prime Minister Naoto Kan said Monday he has decided to seek a 5 percentage
point cut in the corporate income tax rate in the hope of creating more jobs
and attracting greater investment in Japan.
Kan said he was asked by Finance Minister Yoshihiko Noda and Koichiro Gemba,
state minister in charge of national policy, to choose between a cut of 3
percentage points or 5 percentage points before meeting with the press in the
late evening in front of his residence.
Kan told reporters he decided to back the idea of a 5 percentage point cut ''as
more and more companies moving abroad and losing jobs won't be a plus for the
Japanese economy and for those (young people) who start to work.''
Kan said he will ask the business world to use the money they will save from
the tax cut to help boost Japan's economy and beat its persistent deflation.
The effective rate of the tax currently stands at around 40 percent, relatively
high by international standards.
The order by the prime minister follows work by a government panel on tax
reform plans for the next fiscal year, which will be outlined later this week.
The work is in line with the process of the government compiling the state
budget for fiscal 2011, starting in April.
The issue of corporate tax had been one of the sticking points in the budget
formation, involving fierce debates between ministries.
While the Ministry of Economy, Trade and Industry had called for a 5 point cut
in the tax, backed by business leaders, the Finance Ministry urged it to secure
alternative revenue sources to make up for a shortfall as a result of the tax
reduction. The shortfall is expected to be around more than 1 trillion yen.
On Monday, the industry ministry said it will secure some 650 billion yen as
alternative revenue sources. The decision came after the Finance Ministry
pressed it to exercise wisdom.
The Tax Commission, a government panel headed by Noda, is set to scale down the
deduction arrangement for inheritance tax to secure some 200 billion yen to
partly finance the envisaged corporate tax cut, sources close to the matter
said.
As the government moves to form a new budget, there are some other issues that
have sparked fierce debates.
The government will set aside some 200 billion yen to realize a key policy of
raising monthly child allowances in the next fiscal year, sources close to the
matter said, despite fiscal constraints limiting the policies Japan can take to
boost the country's faltering economy.
The decision followed an agreement between the Finance Ministry and the
Ministry of Health, Labor and Welfare that the government should reduce tax
deductions for salaried workers and others in a bid to secure the funds to pay
for the policy of raising the child allowances to 20,000 yen per month from the
current 13,000 yen for children aged under 3, the sources said.
The agreement reinforced the view that the government has abandoned an earlier
pledge by Kan's Democratic Party of Japan to pay 26,000 yen a month to all
children starting next fiscal year until they leave junior high school,
normally at the age of 15.
The move is seen as a result of the premier's efforts to restore Japan's fiscal
health, the worst among major developed economies, with its gross public debt
approaching nearly 200 percent of gross domestic product.
Also Monday, the commission said individuals will have to shoulder an
additional tax burden of up to 553 billion yen over the next few years, showing
revision plans for income, inheritance and some other taxes. It also revealed
options that would lead to a greater burden on wealthier people in supporting
public finances.
Under the tax reforms, which would finance key policies, the government could
limit deductions from taxable incomes for salaried workers with annual pay of
more than 15 million yen and significantly reduce the deduction amount for
executive compensation of over 20 million yen, the panel said.
Kan's Cabinet is expected to approve the reform plans possibly on Thursday.
==Kyodo
Prime Minister Naoto Kan said Monday he has decided to seek a 5 percentage
point cut in the corporate income tax rate in the hope of creating more jobs
and attracting greater investment in Japan.
Kan said he was asked by Finance Minister Yoshihiko Noda and Koichiro Gemba,
state minister in charge of national policy, to choose between a cut of 3
percentage points or 5 percentage points before meeting with the press in the
late evening in front of his residence.
Kan told reporters he decided to back the idea of a 5 percentage point cut ''as
more and more companies moving abroad and losing jobs won't be a plus for the
Japanese economy and for those (young people) who start to work.''
Kan said he will ask the business world to use the money they will save from
the tax cut to help boost Japan's economy and beat its persistent deflation.
The effective rate of the tax currently stands at around 40 percent, relatively
high by international standards.
The order by the prime minister follows work by a government panel on tax
reform plans for the next fiscal year, which will be outlined later this week.
The work is in line with the process of the government compiling the state
budget for fiscal 2011, starting in April.
The issue of corporate tax had been one of the sticking points in the budget
formation, involving fierce debates between ministries.
While the Ministry of Economy, Trade and Industry had called for a 5 point cut
in the tax, backed by business leaders, the Finance Ministry urged it to secure
alternative revenue sources to make up for a shortfall as a result of the tax
reduction. The shortfall is expected to be around more than 1 trillion yen.
On Monday, the industry ministry said it will secure some 650 billion yen as
alternative revenue sources. The decision came after the Finance Ministry
pressed it to exercise wisdom.
The Tax Commission, a government panel headed by Noda, is set to scale down the
deduction arrangement for inheritance tax to secure some 200 billion yen to
partly finance the envisaged corporate tax cut, sources close to the matter
said.
As the government moves to form a new budget, there are some other issues that
have sparked fierce debates.
The government will set aside some 200 billion yen to realize a key policy of
raising monthly child allowances in the next fiscal year, sources close to the
matter said, despite fiscal constraints limiting the policies Japan can take to
boost the country's faltering economy.
The decision followed an agreement between the Finance Ministry and the
Ministry of Health, Labor and Welfare that the government should reduce tax
deductions for salaried workers and others in a bid to secure the funds to pay
for the policy of raising the child allowances to 20,000 yen per month from the
current 13,000 yen for children aged under 3, the sources said.
The agreement reinforced the view that the government has abandoned an earlier
pledge by Kan's Democratic Party of Japan to pay 26,000 yen a month to all
children starting next fiscal year until they leave junior high school,
normally at the age of 15.
The move is seen as a result of the premier's efforts to restore Japan's fiscal
health, the worst among major developed economies, with its gross public debt
approaching nearly 200 percent of gross domestic product.
Also Monday, the commission said individuals will have to shoulder an
additional tax burden of up to 553 billion yen over the next few years, showing
revision plans for income, inheritance and some other taxes. It also revealed
options that would lead to a greater burden on wealthier people in supporting
public finances.
Under the tax reforms, which would finance key policies, the government could
limit deductions from taxable incomes for salaried workers with annual pay of
more than 15 million yen and significantly reduce the deduction amount for
executive compensation of over 20 million yen, the panel said.
Kan's Cabinet is expected to approve the reform plans possibly on Thursday.
==Kyodo
