With an eye on propping up sluggish household spending and boosting business investment to aid the economic recovery, the ruling coalition on Tuesday adopted tax reform policies for next year entailing corporate tax cuts and expansion of tax breaks to the wealthy.

By bolstering the profitability of big firms and promoting asset transfers from the elderly to the younger generation, Prime Minister Shinzo Abe hopes to strengthen his "Abenomics" policy mix and energize local economies across the nation.

But the reform plan, crafted by Abe's Liberal Democratic Party and its junior coalition partner Komeito, does not contain drastic measures to support lower income earners and smaller companies, both dogged by price rises following last April's consumption tax hike and the weaker yen.