The government’s Council on Economic and Fiscal Policy is drawing up an economic revitalization package featuring the introduction of a fall vacation for schools and a three-year plan to promote outsourcing of public-sector services, according to an interim draft report.
The council, led by Prime Minister Junichiro Koizumi, is also considering introducing a system to lower taxes on financial and capital gains, such as interest on bank deposits and savings, and profits from sales of stock, said the draft report obtained Wednesday by Kyodo News.
In the area of tax reform, the draft calls for expanding the application of the consolidated taxation system to subsidiaries in which parent firms hold at least 80 percent stakes. A bill to be submitted soon to the Diet states the system is applicable only to wholly owned subsidiaries.
The interim report will be presented by the council’s private-sector members as “proposals” when the council meets Monday.
The government will finalize the plan in June, along with a basic policy for tax reforms, after stipulating specific target dates for each measure.
According to the draft, the interim plan calls for launching “structural reform zones” where the government would drastically ease regulations and for further privatizing public corporations.
It would also promote concluding free-trade agreements that would lead to further opening of the domestic market.
The plan calls on the government to concentrate the allocation of science and technology budgets into four key areas, including biotechnology, while proposing budget cuts in such areas as space development and nuclear power.
It urges the government to cut the gift tax for elderly people wishing to give their homes to their children before they die, and also calls for easing taxation of nonprofit organizations.
Moreover the plan calls on the government to make improvements in the areas of employment, the environment, waste management and sightseeing — all of which are seen as growth sectors.
It urges the government to draw up an emergency project involving government, industry and academic figures to boost Japanese manufacturers’ competitiveness and their workers’ skills.
The government is also asked to encourage people to launch new businesses by reviewing the current system on the minimum capital for business startups.
As for urban revitalization, the plan calls for expanding Tokyo’s Haneda airport and allowing it to handle international flights within five years.
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