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Japanese PM Abe to slash corporate tax by 3.29%

Japanese PM Abe to slash corporate tax by 3.29%

TOKYO: The Shinzo Abe ruling coalition plans to cut the corporate tax rate by more than 3.29 percentage points in the fiscal years 2015 and 2016, according to Japanese media.

Senior Liberal Democratic Party (LDP) officials and Komeito tax experts agreed to reduce some corporate tax breaks.

The ruling coalition, the LDP and its junior partner Komeito, is scheduled to formulate its fiscal 2015 tax reform policies tomorrow.

The Abe government has promised to reduce Japan’s relatively high corporate tax rate to around 30% from the current 35%. The effective corporate income tax rate, the total of national and local taxes, is higher than China’s 25%, South Korea’s 24% and Singapore’s 17%.

Apart from the new tax proposal, companies will be allowed to deduct research and development costs worth up to 25% of corporate taxes from their tax payments, down from the current maximum deduction of 30%.