The ruling bloc of Japan announced on Tuesday that around 300 billion yen (approx. $3.05 billion) in tax cuts have been proposed to improve business investments in the country, despite the expected tax increase. Prime Minister Shinzo Abe’s administration also considers the proposal a good move to push further the economic growth.
The government remains firm to keep the 8-percent tax hike beginning April next year. However, the administration also plans to lessen the gravity of tax increase to companies that will be affected. The tax cuts will be part of the economic stimulus package and will be prepared by the administration team before the month ends. A Liberal Democratic Party panel stated that tax break measures will be granted for companies that will feature or purchase advanced equipments by March of 2017.
As for local taxes, there will be an exception from fixed-asset taxes for a period of time should a company build establishments that will be more resilient to earthquakes. These include hospitals and hotels. Prompted by the results of the Tankan economic survey by the Bank of Japan, Prime Minister Shinzo Abe is set, or at least expected, to finalize the new tax policy concerning consumption taxes next Tuesday. According to Chief Cabinet Secretary Yoshihide Suga, Abe will decide should the first round of the consumption tax increase be implemented.
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