Japan’s ruling coalition sees a need to review financial capital gains taxes to ensure fairness, but wants to avoid putting off ordinary investors, according to a copy of the party’s fiscal 2022 tax plan seen by Bloomberg.
The ruling parties said in the document there was a need to consider rectifying a situation in which people with higher incomes sometimes pay lower rates of tax. The coalition is expected to release the details of its tax plan Friday.
“We will fully take into account the need to avoid damaging the environment for ordinary investors, and consider the issue based on systems in other countries and the effect on markets,” the ruling parties said in the document.
Prime Minister Fumio Kishida has wavered over revising the tax, after the proposal was greeted with a fall in share prices and market criticism. The idea won’t be included in the tax plan that takes effect from April, in which the coalition has prioritized other issues, such as supporting companies that raise wages.
“I believe it will be considered next year or later, depending on the markets and the economy,” ruling Liberal Democratic Party tax panel chief Yoichi Miyazawa told reporters Thursday.
Kishida made the proposal as part of his “new capitalism” platform, which is aimed at reducing disparities and expanding the country’s middle class through better distribution of the fruits of economic growth. He told parliament Wednesday that revising the tax was one option for distributing wealth.
Other major points in the tax proposal for the fiscal year starting in April include:
- To consider unified taxation on income from derivatives trading, based on the results of deliberations on prevention of deliberate tax avoidance.
- Large companies to get up to 30% tax rebate and smaller companies up to 40% tax rebate for raising wages.
- Strengthening of system for suspending use of special tax measures by companies that are particularly reluctant to invest or raise pay, even when profits are growing.
- Tax rebate for home mortgages will be extended for four years, but reduced to 0.7% of the outstanding amount from the previous 1%.
- Tax incentives for introducing 5G technology to be revised and extended.
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