The new securities tax code took effect Jan. 1, featuring tax cuts on dividends from stocks that brokers hope will spur investment in the wake of a tough year in which the Nikkei average sank to the lowest yearend levels in two decades.
But many investors have voiced concern over changes in the capital gains tax, saying abolition of a low 1.05 percent withholding tax and increased paperwork requirements will make them more reluctant to trade shares.
"It's one win but one loss," said Norihiro Fujito, senior investment strategist at Mitsubishi Securities Co. "Investors are happy about dividend tax cuts, but they are against changes in the capital gains tax, saying they virtually represent tax hikes."