Tax to Be Cut by Up to 20% for Firms Increasing Wages (News)
Tokyo, Dec. 11 (Jiji Press)—Japan's government and ruling bloc are in the final stages of talks on a plan to cut corporate tax by up to 20% for companies that increase wages, as part of measures to support their efforts for boosting productivity, informed sources said Monday.
The plan will cover large companies that increase pay by 3% or more year on year per worker and small firms offering hikes of at least 1.5%, the sources said.
This will be included in the Liberal Democratic Party–led ruling camp's fiscal 2018 tax reform package, which will be compiled on Thursday, as a temporary step for three years to help spur corporate investment and bring about a revolution in productivity, the sources said.
At present, large companies carrying out wage hikes have their corporate tax payments cut by up to 10%.
By expanding the system, the government and the ruling bloc will allow large firms offering wage hikes of at least 3% and making investments on facilities at home equivalent to 90% or more of depreciation costs to deduct 15% of the total amounts of wage hikes from their corporate tax payments, the sources said.[Copyright The Jiji Press, Ltd.]