Japan Ready to Cut Corporate Tax Rate

Finance Minister Taro Aso said Tuesday he will accept Prime Minister Shinzo Abe’s proposal to cut Japan’s relatively heavy corporate income tax rate from next fiscal year if financial resources can be secured to cover a possible decrease in tax revenues.

It was the first time that Aso expressed acceptance of implementing corporate tax cuts, although he had argued the tax change would hamper the government’s attempt to restore Japan’s fiscal health — the worst among major developed economies.

“It’s OK (to cut the corporate tax rate) if stable financial resources are found,” Aso said at a press conference.

His remarks came before talks between Abe and Takeshi Noda, chairman of the ruling Liberal Democratic Party’s tax panel, later in the day to add a final touch on the LDP’s proposal on how to reform the country’s corporate tax system.

During the meeting, Abe, head of the LDP, is expected to urge Noda to allow the government to reduce Japan’s corporate tax rate as soon as possible.

Noda, meanwhile, is set to ask Abe’s administration to continue pursuing its goal of turning the primary balance — annual tax and nontax revenues minus outlays other than debt-servicing costs — into a surplus by fiscal 2020.

via Mainichi

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Alfonso Esparza

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.
Alfonso Esparza