Japan to cut investment tax to boost firms' capital spending

TOKYO, June 12 Wed Jun 12, 2013 7:48am EDT

TOKYO, June 12 (Reuters) - Japan plans to help its corporations by cutting tax on investment to boost their capital spending, a draft of the nation's growth strategy showed on Wednesday.

The investment tax break was added to a series of measures the government unveiled last week in the first part of its growth strategy plan, which included targets such as increasing private-sector capital expenditure and infrastructure exports.

The growth strategy is expected to be approved by the cabinet on Friday.

At a government panel meeting on industrial competitiveness on Wednesday, Prime Minister Shinzo Abe said he wanted to start debate on tax reform after the July upper house election.

The government plans to lay out the second part of its growth strategy in the autumn.

Abe this month pledged to raise incomes by 3 percent annually and set up special economic zones to attract foreign businesses in the third tranche of measures aimed at boosting growth in the world's third-biggest economy.

The growth strategy is the "Third Arrow" in his "Abenomics" prescription to end deflation and spur sustainable growth. The first two "arrows" are hyper-easy monetary policy and big government spending.

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