LDP Tax Panel OKs Hikes of 3 Taxes for Defense Boost
Tokyo, Dec. 15 (Jiji Press)--The tax panel of Japan's ruling Liberal Democratic Party on Thursday approved plans to raise the corporate and two other major taxes to finance an envisioned defense spending boost.
But the plans, endorsed by the LDP's Research Commission on the Tax System, do not make clear when the taxes will be raised, only saying that the hikes will be carried out at appropriate times in or after 2024.
Under the plans, Japan will add a surtax of 4.0 to 4.5 pct to the corporate tax without changing the regular tax rates.
Smaller companies will be allowed to deduct up to 24 million yen in income before applying the surtax, up from the previously expected 10 million yen. The tax credit would exempt more than 90 pct of such companies from the surtax entirely.
Also, a surtax of 1 pct will be added to the special income tax for supporting reconstruction after the March 2011 earthquake and tsunami. Revenue from the surtax will be used for defense purposes for the time being.
[Copyright The Jiji Press, Ltd.]