Any reduction in the corporate income tax should be considered only within the scope of revenue that can be gained by expanding the taxable income base for companies, a top Finance Ministry official indicated Sept. 29.
Vice Finance Minister Takeshi Komura noted that the government plans to stop issuing deficit-covering bonds by fiscal 2003 and that any changes to the corporate tax rate should be consistent with this target. "I know there are calls (within the business community) for a tax reduction that is greater than one that would be made possible by reviewing the extent of taxable income, but the question is, 'How will we finance such a tax cut?'" he said.
Prime Minister Ryutaro Hashimoto said in his policy speech earlier in the day that the government will consider reducing the corporate tax by making adjustments to the taxable income base. The Finance Ministry opposes any cut in the corporate tax rate in real terms that would further damage the nation's coffers, and wants to maintain current revenue levels.