The ruling Liberal Democratic Party basically agreed Thursday to raise the income threshold for the spousal tax deduction system to ¥1.5 million ($13,300) from ¥1.03 million to encourage more women to participate in the workforce.
The current threshold on annual earnings has been criticized for discouraging women from working long hours or taking full-time jobs.
To avoid a decline in tax revenue, households with annual income exceeding ¥11.2 million will not qualify for the tax deduction under the proposal by the LDP's tax commission, lawmakers said.