Nearly half of Japanese firms will raise wages even without further tax incentives for company pay hikes that the government is planning to introduce next fiscal year, according to a survey by a credit research company.

The survey by Teikoku Databank Ltd. indicates that more managers are prioritizing higher wages to attract and retain workers amid the country's longtime labor shortage and rapidly graying population, although the economic outlook remains uncertain due to the fallout from the coronavirus pandemic.

The ruling Liberal Democratic Party and its junior partner Komeito are considering expanding an existing tax reduction system to encourage companies to raise wages as part of a tax reform package for fiscal 2022 starting April, under Prime Minister Fumio Kishida's signature policy of correcting wealth disparities by boosting middle-class incomes.