Banks that sell loans to get tax breaks

The government may give tax breaks to banks selling loans to the planned Industrial Revitalization Corp., industrial revival minister Sadakazu Tanigaki said Friday.

"We are now mapping out the plan with tax authorities," Tanigaki said.

Under the plan, banks will be allowed to deduct estimated losses from the sale of loans to the entity from their taxable income.

After being cleared by the Diet, the new entity will be launched as a government-backed company as early as May. It will have the task of buying problem loans from smaller creditor banks to help revive firms that are saddled with debt but are still viable.

The entity had been tentatively titled the Institution for Industrial Revival but was renamed in the course of the government drafting a bill to set it up, a government official said.