Hideyuki Aizawa, head of the tax panel of the Liberal Democratic Party, said the LDP will seek to implement a tax break for relatively small capital gains during the current Diet session that ends June 29.

He also said the party will aim to remove a ban on treasury stocks during the same session.

Aizawa, the newly appointed chairman of the Tax System Research Commission, said his panel will draft the relevant bill to make small capital gains tax-free so that it can be submitted to the Diet on Thursday.

Speaking to reporters after a meeting of the LDP tax panel, Aizawa also said panel members agreed to seek legal changes to relax curbs on tax-free small-sum savings and the investment system for people aged 65 or older during the current Diet session.

At present, people older than 65 are eligible for exemption from a 20 percent tax on interest and dividends derived from bank deposits, postal savings and bonds.

When putting money in mutual funds, however, they are given a tax break of this kind only if the percentage of shares in mutual funds does not exceed a level of 70 percent.

Aizawa said the panel will not seek to implement other proposed tax breaks designed to revitalize the sagging stock market during the Diet session.

“We will pinpoint problems (in the current securities investment taxation system) during the current Diet session so that we may submit bills to a Diet session convening in autumn,” Aizawa told reporters.

The former head of the Financial Services Agency was speaking in respect of a proposed set of tax breaks designed to motivate individual investors to shift their funds and savings into the stock market. The measures were released as a part of an emergency economic stimulus package on April 6.

The tax panel will likely discuss a proposal to speed up bureaucratic procedures on the issue of whether tax breaks should be given for loan-loss reserves and profits used to cover losses from problem loans that are put up by a bank, LDP officials said.

Banking industry leaders and some LDP policy experts have been calling for the acceleration of procedures for determining whether the government should allow a bank to deduct from its pretax profits the amount of new loan-losses, as an incentive to push the disposal of bad loans.

“I would like to convene meetings of tax panel members once or twice a week,” Aizawa said.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.