TOKYO: Having grown impatient with Japan Inc.’s hoarding of cash, the Japanese government will introduce provisions in its corporate tax rules starting in fiscal 2018 to encourage companies to raise wages and boost capital investment.
That is equal to 40% of Japan’s gross domestic product and up by more than a third from five years earlier. Prime Minister Shinzo Abe believes this pile of cash lies at the root of Japan’s economic malaise and deflationary pressure because it could have been spent on raising workers’ wages or investment, thereby lifting economic growth and inflation.