Japan to Extend Tax Breaks for Firms Relocating from Tokyo
Newsfrom JapanPolitics Lifestyle
Tokyo, Dec. 3 (Jiji Press)--Japan's government and ruling bloc plan to extend for two years current tax breaks for companies relocating their key functions from Tokyo's 23 wards to rural areas, it was learned Tuesday.
The tax measure is slated to expire at the March 2020 end of fiscal 2019. The extension comes as the government of Prime Minister Shinzo Abe finds it necessary to continue incentivizing firms to relocate to the countryside toward resolving the concentration of businesses in Tokyo, informed sources said.
The ruling coalition of the Liberal Democratic Party and Komeito will include the plan in its tax reform program for fiscal 2020, according to the sources.
The tax incentives were introduced in fiscal 2015 as part of Abe's mainstay policy of promoting regional revitalization. Companies will have their corporate tax payments reduced based on the number of employees hired or the value of buildings acquired as a result of relocating their administrative functions or research and development hubs from central Tokyo to rural areas, or boosting the functions of their headquarters already located in the countryside.
The tax break system was used for only 74 cases in the three years through fiscal 2017. Some in the government had been wary of giving the scheme an extension, noting that its use and effects were limited.
[Copyright The Jiji Press, Ltd.]