Japan Eyes Business Tax Reforms

by Mary Swire, Tax-News.com, Hong Kong

30 October 2001

The Japanese Finance Minister, Masajuro Shiokawa, revealed at the weekend that the government is seriously considering the introduction of tax reforms to boost the country's business sector, as the Prime Minister's pledge to cap government bond issues at 30 trillion yen (US$246 billion) has left little room for major fiscal spending.

'Keeping the 30 trillion yen ceiling means we have shown our political resolve to fiscally discipline ourselves,' the minister explained on a Japanese talk show. 'Given tight state finances, we must choose ways to stimulate the economy with tax reforms. I would like to implement tax reforms for small and mid-sized firms and tax reforms to create a more favourable economic environment for the venture business.'

It was announced on Friday that the government has approved the framework of a 3 trillion yen additional budget designed to deal with Japan's rising unemployment rate and to address the problems of the troubled banking sector. The extra budget is due to be approved by Koizumi's cabinet in early November, and then submitted to parliament.

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