The Liberal Democratic Party-New Komeito ruling bloc on Thursday released tax reform proposals for fiscal 2008, including a two-year extension for tax breaks on capital gains, that indicate it is trying to support Japan's turmoil-stricken stock market.
The coalition meanwhile skipped any specific timetable or margin for a consumption tax hike, only hinting at a future increase in the 5 percent levy as the core source of revenue to cover rising social security costs.
According to the proposal by the coalition's tax panel, a 10 percent preferential rate will continue through the end of 2010 on capital gains on financial investments of up to ¥5 million and dividends of up to ¥1 million. However, capital gains and dividends above these levels will be subject to the original 20 percent tax beginning in January 2009.