Japan Tax Reform Requests Focus on Growth Investments

Tokyo, Aug. 31 (Jiji Press)--Japanese government agencies and ministries have submitted their tax system reform requests for fiscal 2027, including measures aimed at realizing a strong economy as advocated by the administration of Prime Minister Sanae Takaichi, such as spurring companies' growth investments.

A tax reform package for the fiscal year starting next April will be compiled at the end of this year following examinations of the requests by the tax panels of the government and the ruling parties.

The industry ministry sought the establishment of a system to defer corporate tax payments on business sale profits. The system will be designed to help companies increase cash reserves during business reorganization and back up their growth investments through new business acquisitions using the funds.

To support Tokyo-based Rapidus Corp., which aims to start mass-producing cutting-edge semiconductors, the ministry asked for tax relief for in-kind contributions, in which government-owned assets, such as factories, are exchanged for shares in the company.

The existing tax system for business succession, which grants gift and inheritance tax relief, may be thoroughly revamped to promote corporate capital spending in order to enhance the earning power of small companies.

[Copyright The Jiji Press, Ltd.]