OSAKA — Heizo Takenaka, state minister in charge of economic and fiscal policy, said Sunday a key government panel will discuss cuts in income and corporate taxes as part of tax reforms.
Speaking in Osaka, Takenaka said, “We will discuss lowering the basic rates of income and corporate taxes.”
The Council on Economic and Fiscal Policy, chaired by Prime Minister Junichiro Koizumi, is to produce a basic policy on tax reforms in June as part of efforts to revitalize the economy.
The tax reductions will be coupled with the introduction of special incentive measures to encourage capital investment and research and development by firms, Takenaka said.
The panel also plans to propose reducing deductions from taxable income and special taxation measures in order to even the tax burden, he said.
It will discuss introducing a taxpayer identification numbering system to capture individuals’ taxable income and to minimize tax evasion, according to Takenaka, adding that the numbering system will also be necessary to levy a low-rate tax on income from financial trading separately from work earnings.
It is also expected to discuss unifying donation and inheritance taxes in an effort to ease tax burdens on donations. The possible reform of the gift and inheritance taxes is apparently aimed at promoting transfer of financial assets from old people to younger generations to spur consumption.
The panel is expected to include these ideas in its summary of points under discussion to be made public Friday.
In its midterm fiscal and economic outlook, the panel sees the coming two years from fiscal 2002 that starts in April as a period of intensive adjustment for economic growth led by domestic demand.
During the period, it will apparently prioritize tax reductions to stimulate the economy.
Takenaka earlier said the government could fund tax cuts through wide-ranging reforms such as the sale of state assets.
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