Japan Govt Adopts FY 2023 Tax System Reform Guidelines
Tokyo, Dec. 23 (Jiji Press)--The Japanese government Friday adopted its tax system reform guidelines for fiscal 2023, including the policy of increasing corporate, income and tobacco taxes to raise over 1 trillion yen in fiscal 2027 to bolster the nation’s defense.
To expand defense spending, the government eyes a surtax of 4.0-4.5 pct to the corporate tax. It also looks to add a surtax of 1 pct to income tax, while lowering the rate of special income tax to cover reconstruction after the March 2011 earthquake and tsunami by 1 percentage point and extending the taxation period. Tobacco tax will be raised by 3 yen per cigarette in stages.
The government deferred its decision to next year on when to carry out the tax increases, however, due to strong backlash particularly from within the ruling Liberal Democratic Party.
The review of tax incentives for individuals and businesses is seen eventually resulting in a net tax reduction of 9.9 billion yen a year.
The much-heralded expansion of the NISA small-lot investment promotion scheme is projected to reduce tax revenue by 15 billion yen, while the research and development tax incentive for companies is estimated to lower revenue by 13 billion yen.
[Copyright The Jiji Press, Ltd.]