Prime Minister Shinzo Abe and his ruling Liberal Democratic Party's tax panel agreed Tuesday to cut Japan's corporate tax rate from fiscal 2015 on the condition that the government continues efforts to restore the country's precarious public finances.
Earlier in the day, Finance Minister Taro Aso voiced his support for cutting corporate taxes for the first time, with the caveat that financial resources can be secured to cover a possible decline in tax revenues.
The focus will likely turn now to how fast the government will cut Japan's relatively heavy corporate tax rate and whether it can come up with alternative tax revenues.