Prime Minister Shinzo Abe pledged to world business and political leaders Wednesday that Japan will “set about further reform on corporate tax this year,” expressing eagerness to carry out tax cuts in order to attract investment from abroad.
In the speech he gave at the opening session of the World Economic Forum in the Swiss resort of Davos, Abe also emphasized that uncertainties in Asia would affect “the entire world,” apparently warning against China’s aggressive military expansion.
Abe, who is trying to beat nearly two decades of deflation, became Japan’s first prime minister to deliver a keynote speech at the main session of the annual forum.
In the speech, Abe put emphasis on the significance of structural reforms in Japan, particularly aimed at restoring the country’s international competitiveness and reinforcing its innovation capacity.
The Japanese government must “make the tax system for companies internationally competitive,” Abe said.
“We will also encourage companies to use the cash they have gathered towards capital investment, R&D (research and development), and raises in workers’ salaries. To do this, we will put tax incentives into place in a way completely different from before,” he added.
To invigorate private-sector investment, Abe promised that the government will end its decades-long policy of protecting rice farmers by limiting their production and allow firms to enter the retail electricity market, saying, “In Japan, people have long said that such a thing is just impossible.”