The Liberal Democratic Party and Komeito on Jan. 24 adopted a tax outline for fiscal 2013, with emphasis on support to business enterprises, including measures to encourage wage increases, employment expansion, capital investment, and investment for research and development.

The outline envisages a tax reduction of some ¥250 billion in fiscal 2012 in both national and local taxes. The ruling coalition apparently hopes to increase voters’ support in the coming Upper House election by presenting tax measures expected to contribute to pulling the Japanese economy out of deflation. If the economy fails to pick up and tax revenues do not increase, Japan will be forced to rely more on debt financing.

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