Japan Plans to Tax High Earners

December 9, 2013 Share Print 0

The government and the ruling Liberal Democratic Party are in the final stages of talks to increase the tax burden of corporate employees who make more than 12 million yen a year by trimming tax credits, sources familiar with the matter said Sunday.

In its tax reform outline to be compiled possibly Thursday, the government will propose raising the income and residential tax payments of high earners.

The government hopes to extend the range of those covered in the future to individuals making 10 million yen per year.

At present, the maximum amount of tax credits for those making just over 15 million yen a year is 2.45 million yen.

Under the latest proposal, the maximum amount of tax credits for those earning 12 million yen will be reduced to 2.3 million yen.

The government is expected to introduce the increased tax burden in 2016 or later, after the sales tax rate is raised to 10 percent in October 2015.

The consumption tax rate is set to rise to 8 percent next April from the current 5 percent.

via Mainichi

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.