The government began considering on Thursday an overhaul of income tax breaks for taxpayers with spouses to encourage more women to take up jobs, government officials said.
The move is in line with Prime Minister Shinzo Abe’s policy of promoting women’s participation in the workforce but is likely to lead to a tax increase for high-income households with full-time housewives or wives working part-time.
The government’s tax system council will hold a general meeting on Monday to resume its debate on the subject for the first time in about three months.
Under the current tax system, taxpayers can claim special deductions of ¥380,000 from their taxable earnings if their spouse earns no more than ¥1.03 million a year. Higher-income households are said to see greater benefits under the current system.
But given criticism that the current tax and social security systems give an unfair advantage to taxpayers with nonworking housewives and tend to discourage women from seeking employment, the government plans to review the systems by the end of this year in a comprehensive manner, according to the officials.
Under the envisioned tax system, the income tax breaks for taxpayers with spouses would be eliminated, and a certain amount of money deducted whether the households have full-time housewives or not. The idea is to establish a system that is neutral to how women work.
The council aims to compile a midterm report in roughly two years that would cover other income tax deductions, according to the officials.