The government could start debate next fall on whether to slash corporate income tax rates, the economic and fiscal policy minister said Tuesday.
"We should consider overhauling the entire national taxation system next fall and cutting corporate income tax rates could be one topic of discussion," Hiroko Ota said.
The minister, who heads the government's key economic policy-setting panel, said that corporate income tax rates, currently at about 40 percent, are "still high" compared with levels in some European and Asian countries. For example, the tax rate in Sweden is 28 percent, the U.K. is 30 percent and China is 33 percent.
Prime Minister Shinzo Abe's government has already decided to shelve the debate on a consumption tax hike, currently at 5 percent, until next fall, as the Liberal Democratic Party doesn't want the issue to affect it's chances of winning a majority in the House of Councilors next July.
Ota said debate on reducing the corporate tax burden could start earlier, as the asset-depreciation rules will be reviewed during discussions on tax changes for fiscal 2007.
The Finance Ministry is considering shorter depreciation periods for manufacturing plants and equipment and allowing firms to write off 100 percent of their production facilities' startup acquisition costs.