TOKYO: Japan’s government has decided to lower the corporate tax rate, one of the highest among major economies, by 2.5 percentage points next fiscal year to increase corporate competitiveness, the media reported.
Japanese Prime Minister Shinzo Abe had been planning to lower the corporate tax rate over several years to around 20 percent from more than 35 percent currently.
However, Abe wants to make a big cut in tax rate from the next fiscal year starting in April to kick start his economic reform agenda after a comfortable win in a lower house election on Sunday, the Nikkei said on Tuesday.
Abe’s ruling Liberal Democratic Party will debate tax reform starting on Tuesday and with the aim of completing its tax reform plan on Dec. 30, the Nikkei said.
It is possible that the government could cut the corporate tax rate by more than 2.5 percent in fiscal 2016, the Nikkei said.
Other steps the government is considering are limiting the amount of losses companies can carry forward to lower their tax burden and exempting small firms from other measures to expand the tax base, the Nikkei said.