Japan's Abe Unveils Plan To Cut Corporate Tax Rate To Spur Growth | Reuters

July 19, 2014

Japannews 5, 2014. REUTERS/Laurent Dubrule' style='float:left;padding:5px' /> The government said in its draft economic and fiscal policy outline it would decide on a concrete plan by year's end to secure a "permanent revenue source" needed for corporate tax cuts, such as by broadening the tax base. An alternative revenue source must be secured permanently so that Japan can achieve its aim of bringing its primary budget balance - excluding new bond sales and debt servicing - into the black in the fiscal year to March 2021, it said in the draft. The government reiterated it would decide by year-end whether to go ahead with its plan to raise the sales tax to 10 percent in October 2015. The national sales tax rose to 8 percent from 5 percent on April 1 in a bid to fix the public debt. Japan's corporate tax rate is nearly 36 percent for large companies operating in Tokyo, among the highest in the industrialised world. Private-sector members of the government's top economic and fiscal council have proposed cutting the rate to 25 percent eventually to put it in line with international standards. Japan's corporate tax rate ranks second after the United States among the 34-member OECD economies, with countries such as Britain, Italy, Canada below 30 percent. In Asia, China and South Korea impose a corporate tax around 25 percent see page and Singapore puts it at 17 percent. The government is hoping to see lower corporate tax rates lure foreign direct investment (FDI) and spur capital spending at home, rather than boosting cash reserves at firms.
Read more: http://www.reuters.com/article/2014/06/13/us-japan-economy-abe-idUSKBN0EO0K320140613?feedType=RSS

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