The ruling Liberal Democratic Party’s tax panel agreed Wednesday to list three types of tax cuts, including one intended to encourage housing purchases, in the outline of an economic stimulus package due to be released today.
The two others to be included in the package are a corporate tax cut and a reduction in personal income and residential taxes, amounting to some 7 trillion yen.
But no further details were worked out at Wednesday’s meeting of the LDP Research Commission on the Tax System, said Yuji Tsushima, an executive member of the panel.
The 7 trillion yen worth of cuts in corporate, personal income and residential taxes are in line with the pledge Prime Minister Keizo Obuchi made last summer. The housing-related tax reductions are unlikely to materialize this year, primarily due to time constraints.
Tsushima also pointed out that the thorny issue of how to allocate the burden of tax cuts between the debt-ridden central and local governments remains unresolved.
The panel urged the Finance Ministry and the Home Affairs Ministry to try to reach an agreement on the issue before the extra Diet session starts later this month.
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