Economic and fiscal policy minister Akira Amari expressed eagerness to reduce Japan’s relatively heavy corporate tax rate to around 29 percent in stages from the next fiscal year, Japan’s most powerful business lobby said Wednesday.
During a meeting with Sadayuki Sakakibara, who assumed the chairmanship of the Japan Business Federation earlier this month, Amari said, “I want to bring (the country’s corporate tax rate) to that in Germany,” according to the group known as Keidanren.
It was the first time that a Cabinet member specified the level to which Japan’s 35 percent tax rate should be cut, after Prime Minister Shinzo Abe pledged Friday to reduce it to below 30 percent within the next few years in a bid to invigorate foreign investment in the nation.
In Germany, the effective corporate tax rate stood at about 29.6 percent as of January 2013, data released by the Japanese Finance Ministry showed.
Amari also told Sakakibara that he will consider funding the corporate tax cuts with possible additional tax revenues on the back of economic recovery spurred by the “Abenomics” policy mix, centering on drastic monetary easing and massive fiscal spending.
“We have been making efforts to promote structural reform to beat deflation, boost nominal economic growth and bolster tax revenues,” Amari, the linchpin of Abe’s economic policies, told reporters after the meeting.
Government officials and ruling lawmakers, however, remain at odds over how to cover a possible decline in tax revenues in the wake of the proposed corporate tax cuts from the next fiscal year starting April 2015.
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