Minister of Economy, Trade and Industry Yoichi Miyazawa said Monday that he will aim to shave "more than 2.5 percentage points" off of the 35 percent effective corporate tax rate in the fiscal year starting April 2015.
It's the first time he has specified a level to which the tax rate should be cut in fiscal 2015, after the Abe administration decided in June to reduce it to below 30 percent within the next few years to help boost foreign investment in Japan.
Miyazawa also told reporters he will accept a plan to expand the scope of corporate tax based on "external standards," such as the number of employees or the amount of capital a company has, in an attempt to minimize an expected decline in tax revenues.
Those measures have been eyed as a way to help stabilize tax revenues, as they are imposed on both profitable and unprofitable companies, regardless of economic fluctuations. Currently only around 30 percent of Japanese firms pay the corporate tax, with the rest being exempt due to poor business performance.
The Ministry of Economy, Trade and Industry has so far opposed the proposed measure, arguing it would only shift the tax burden to unprofitable companies.
Miyazawa made the remarks after he held talks with Sadayuki Sakakibara, head of Keidanren, the country's most influential business lobby.
Sakakibara said after the meeting that Miyazawa made a "very concrete and strong" promise regarding the proposed reforms. Sakakibara also expressed his hope that the corporate tax rate will be lowered in line with Miyazawa's policy.
In a report released in September, Keidanren asked the administration to cut the effective corporate tax rate by more than 2 percentage points in fiscal 2015.