The ruling coalition started full discussions Thursday on tax system reforms for fiscal 2020, including proposed incentives for corporate investment and support for unmarried single parents.
The ruling bloc plans to compile its tax system reform package on Dec. 12.
“Discussions should focus on ensuring a fair and equitable tax system,” Akira Amari, chairman of the ruling Liberal Democratic Party’s Research Commission on the Tax System, told members of the panel.
The LDP and its coalition partner, Komeito, will consider tax incentives to promote investments in startups by major companies that are sitting on large cash reserves.
The balance of internal reserves held by Japanese companies stood at a record high of some ¥463 trillion at the end of March.
Komeito seeks to apply deductions to income and residential taxes that are currently available for parents who became single because of divorce or the death of a spouse to unmarried single parents as well, but the LDP claims that such a move may encourage people to remain unmarried.
For fiscal 2019, the LDP and Komeito only agreed a residential tax exemption for unmarried single parents with annual incomes below certain thresholds.
In the reforms for fiscal 2020, Komeito will seek to provide unmarried single parents with income tax relief as well. “New tax relief should be provided to unmarried single parents” under the fiscal 2020 reform, Makoto Nishida, head of Komeito’s tax panel, told its members.
The ruling coalition is also expected to draw up a proposal about international taxation on global technology giants.