The House of Representatives approved a bill Friday for tax reform in fiscal 2013 that will include lower levies to help boost private-sector investment.
The Lower House, dominated by Prime Minister Shinzo Abe’s ruling coalition, voted for the plan for the year starting April 1. The government hopes the bill will be passed by the opposition-controlled House of Councilors within the month.
The annual reform will center on reducing corporate tax by a certain amount when a company increases payrolls or spends on introducing facilities or equipment designed to save energy.
As the government plans to increase the 5 percent consumption tax to 8 percent in April 2014, it aims to ease the impact from the tax hike on consumer and business spending. The planned reform also includes extending the deadline of lower taxes on housing loans and raising the maximum amount of such reductions.
It will increase income and inheritance taxes, meanwhile, for wealthy people as the government believes they will be less affected by the planned sales tax hike than average people.
The government will also exempt from taxation gifts of money to finance grandchildren’s education as part of its economic stimulus, aiming to tap the huge financial assets held by the elderly at a time when the country’s population is aging.
In the upcoming voting at the Upper House, where the ruling bloc led by Abe’s Liberal Democratic Party lacks a majority, he is expected to obtain support for the bill from the Democratic Party of Japan, the main opposition force, lawmakers said.