TOKYO (Reuters) - Japan plans to lower the corporate tax rate below 30 percent within a few years starting from the next fiscal year, a source told Reuters on Thursday, as part of premier Shinzo Abe’s package of steps to boost Japan’s growth potential.
Abe wants to detail how much Japan will cut the corporate tax rate by in an economic package due this month. However, he has met resistance from his ruling party’s tax panel, which has called for assurances on how to fill the gap in tax revenues to ensure Japan does not delay much-needed fiscal reforms.
Japan’s corporate tax rate is nearly 36 percent for large companies operating in Tokyo. Private-sector members of the government’s top economic and fiscal council have proposed cutting the rate to 25 percent to put it in line with international standards.
Economics Minister Akira Amari met Takeshi Noda, the head of the ruling Liberal Democratic Party’s tax panel, on Wednesday night to discuss the plan.
They agreed to clarify in the government’s guideline on long-term economic policy, to be issued this month, that Japan will lower the tax rate below 30 percent in stages over several years from fiscal 2015/16, which begins in April, the source familiar with the matter told Reuters on Thursday.
Writing by Leika Kihara; Editing by Chris Gallagher and Paul Tait