Japan’s ruling party tax chief said the country’s current inheritance tax system could be adjusted to make it less of a fear factor stopping financial professionals and firms from relocating to the country.
“I’m sure it’s terrifying,” senior lawmaker Akira Amari said in a group interview Wednesday, referring to the current system of taxing foreign residents’ assets outside Japan upon their death if they have lived in the country for a certain number of years.
“There is scope to consider bringing Japan’s inheritance tax closer to international standards,” he added.
Amari’s comments are likely to further fuel speculation that Prime Minister Yoshihide Suga’s administration will take action in the coming months to try and make Japan a more attractive destination for financial sector professionals.
Amari said he wanted to directly sound out Suga on his tax views in the near future.
A local media report earlier Wednesday said the government was considering reducing the inheritance tax for some foreign nationals starting April and allowing unlisted firms to treat foreign directors’ compensation as an expense.
China’s crackdown in Hong Kong has been one reason cited by Japanese officials commenting on a window of opportunity to bring more finance professionals to the country, and make it more of a prominent international financial hub.
Still, Amari warned that various problems will arise if Japan attempts to cut its corporate or income tax to levels close to city states like Singapore or Hong Kong.
“For those taxes it would be difficult just to apply changes to the financial industry,” he said.