Japanese Government Plans To Cut Corporate Income Tax

By HImfr Ivy

Japanese Finance Minister Ye Tian Jiayan Dec. 14 said that the Board of Revenue plans to levy corporate income tax in some countries declined from 30% tax rate to 25.5%. This Japanese Prime Minister Naoto Kan evening of 13 cabinet members made to the Japanese about 40% of the current corporate tax rate cut 5% of the actual instruction is consistent.

Board of Revenue Government of Japan led by the wild Tianjia Yan, currently being finalized, including corporate income tax reform down the details and plans submitted on 16 February will be the program to the Japanese Diet.

Tax cuts to stimulate investment

Naoto Kan, 13, evening said: “I have ordered a cabinet down 5 percentage points of the corporate income tax rate of instructions.” He also said: “The business community can hope for domestic investment, expand employment and increase wages in order to overcome deflation. “

Japanese corporate income tax rate is currently about 40% effective compared to the average level of European and Asian countries is higher. Therefore, the enterprise income tax in Japan in fiscal year 2011 tax reform plan the biggest bright spot, but also Kan interim government in June announced an important part of the financial framework.

In this regard, Japan’s trade minister Ota Wang Chapter 14, “said Japan will create a world-class investment environment. 5% tax rate reduction is the first step in reducing corporate tax rates, tax rates and due to the current Japanese companies is still too high compared to international standards . This will help to inhibit the production of Japanese companies moving out, while increasing domestic investment, activate the economy. “

On the same day, the Japanese Federation of Economic Organizations Hiromasa Yonekura welcomed the plan for tax cuts, saying: “will make every effort to increase domestic investment and workers to meet government expectations. Tax cuts that the effect of the Japanese government leadership.” However, Ren Min Sato Mizuho Securities analyst believes that “the real impact of tax cuts is not yet clear, but now not sure whether the Japanese Government to find adequate alternative sources of income.”

Stretched financial position of fear

Analysts believe that, if you count the Japanese Vice Finance Minister 13 Fumihiko Igarashi 10% of the proposed extension of dividends and capital gains tax preferential policies for the securities, then the Japanese government’s tax cuts next fiscal year to bring financial resources, “hole” indeed not small. Japan’s Finance Ministry expects the reduction of corporate tax revenue will reduce the Japanese from 1400 to 2100 billion yen, the equivalent of revenue for the fiscal year of 4% to 5%. Ye Tian Jiayan in 14 said the current government have not been able to make the tax committee of the sources of income tax cut “hole” agreement.

According to media reports, the Japanese Ministry of Economy on the 13th that would ensure that about 650 billion yen of alternative sources of income. However, Board of Revenue that the scale of 650 billion yen tax cut failed to compensate for the loss of financial resources. According to sources, the Commission may reduce the estate tax cuts in the size of about 260 billion yen in order to ensure additional financial resources. These messages are in that alternative sources of income in order to overcome difficulties, the Japanese government will likely have to “shattering.”

13, the Japanese government has said the tax committee, Japanese households added in the next few years, not more than 553 billion yen in tax burden. But in the current framework of tax reform, the government can limit the annual income of more than 15 million yen of the working-class tax cuts substantially reduced the size and annual income of more than 20 million yen in tax breaks for high-income groups, so that wealthy bear higher levels of debt.

According to another source as saying, as one of Japan’s key fiscal spending childcare subsidies, the Japanese government expenditure in the next fiscal year, about 2,000 billion yen, equivalent to less than 3 years old to have children at a monthly allowance 13000 yuan, to stimulate the domestic market of products for infants and young children.

Japan is the developed economies, the highest burden of government debt countries, the proportion of GDP, government debt has exceeded 200%. Naoto Kan, the Government announced on June 9 in fiscal year 2011, the main contents of the Budget, plans to next year’s budget control within the 71 trillion yen, and issued no more than 44 trillion yen bonds, believing that its expenditure for the finance .

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