Japan Mulling 5 Pct Corporate Surtax for Defense Boost
Tokyo, Dec. 13 (Jiji Press)--Japan’s government and ruling coalition are considering adding a surtax of around 5 pct to the corporate tax to help finance a planned defense spending boost, sources said Tuesday.
The government and the Liberal Democratic Party-led coalition are also examining the idea of extending the special income tax to support reconstruction after the March 2011 earthquake and tsunami for about 20 years and diverting part of the revenue to the defense area.
The LDP and its coalition partner, Komeito, will hold discussions at their tax panels so that a conclusion will be reached within this week, the sources said.
In order to enhance the country’s defense capabilities, the government aims to secure an additional 4 trillion yen in annual defense outlays by fiscal 2027.
The government hopes that out of the amount, over 1 trillion yen will be procured through tax hikes. It estimates that it can raise 700 billion to 800 billion yen if the 5 pct surtax is introduced, given that the annual corporate tax revenue is around 14 trillion yen.
[Copyright The Jiji Press, Ltd.]