The government should set a broad scope for corporate tax cuts to stimulate capital investment, including recognizing investments in software upgrades as capital spending, Keidanren said.
Keidanren urged the government Wednesday to include such special treatment in the second round of measures under the economic growth strategy of Prime Minister Shinzo Abe that is slated to be announced this fall.
The tax cuts should be applied to both manufacturers and nonmanufacturers starting next April, it said.
The federation also asked the government to make the tax reduction system easier for companies to use. Businesses should be entitled to the special treatment if their capital spending rises from the previous year, it said.
The measure should give firms greater incentives to make capital investments by allowing them to choose ways to receive tax deductions, the group said.
Keidanren also wants the government to consider proper steps for local tax payments. For instance, firms should be exempt from paying fixed property tax for assets that are subject to corporate tax breaks.