The government and ruling bloc plan to slash the effective corporate tax rate to 29.74 percent in the fiscal year starting April 2018 from the current 32.11 percent, sources said Friday.
This would be the second of a two-stage tax cut aimed at encouraging firms to increase capital investment and wages, the sources said, as the tax rate for fiscal 2016 is already scheduled to be cut to 29.97 percent.
By further reducing the corporate tax rate, Prime Minister Shinzo Abe is looking to boost economic growth by increasing international competitiveness.