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In a fresh development, the Japanese government is likely to cut the effective corporate tax rate to below 30 percent in fiscal 2016 from April, a year earlier than planned.
Sources said, relevant ministries and agencies are now in talks to slash the rate to a level between 29.5 percent and 30 percent in April, aiming to spur capital spending and boost wages, the people said.
The government initially planned to reduce the rate to below 30 percent in fiscal 2017 after reducing it to 31.33 percent from the current 32.11 percent in fiscal 2016.
Keidanren, Japan’s biggest business lobby has been pressing the government to quickly lower the effective corporate tax rate to below 30 percent.
Moreover, the government will consider expanding size-based corporate taxes, which are levied not only on profitable companies but also loss-making ones, although some critics say such a measure would actually increase the burdens on business.