Economic minister Heizo Takenaka told top ruling coalition policymakers Thursday that a plan to cut the effective tax rate for companies will be included in a tax reform package to be compiled by a key economic panel Friday.
Takenaka made the remark in a meeting with Taro Aso, chairman of the Liberal Democratic Party’s Policy Research Council, and Aso’s counterparts from New Komeito and the New Conservative Party, coalition lawmakers said.
The minister told the three that the package scheduled to be compiled by the Council on Economic and Fiscal Policy will also call for debate on reducing the inheritance tax as well as tax cuts aimed at promoting capital investment, the lawmakers said.
The policymakers urged Takenaka to stipulate in the panel’s package a plan to implement tax cuts by the end of the current fiscal year as part of efforts to boost the nation’s long-suffering economy.
Their requests included a reduction in taxes for the transfer of assets from parents to children before the end of fiscal 2002, according to the lawmakers.
Calls are growing for the ruling bloc to introduce tax cuts of this kind in order to bolster the economy.
The issue of whether Prime Minister Junichiro Koizumi will support the plan remains unclear, however, since cuts of this nature could force him to abandon his 30 trillion yen cap on new government bond issues, a policy pledge that has served as a guideline in compiling the fiscal 2001 and 2002 budgets.
In response to the request, Takenaka was quoted as telling the policymakers, “I have not received any formal instruction (on that point) from the prime minister.”
Takenaka briefed the three after a meeting Wednesday involving Koizumi and his economic ministers, where the cut in the effective levy rates of corporate taxes was discussed.
The panel’s tax reform package will form a major portion of a broader plan for economic and fiscal policy, which the council plans to finalize on June 13.
The step is part of a process by Koizumi’s government to hammer out a basic package on economic and fiscal policy in time for the summit of the Group of Eight major nations in Kananaskis, Alberta, later this month.
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