Japanese Tax Commission Chief Rejects Tax Cut Calls

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

04 January 2002

The head of the Japanese Tax Commission, Hiromitsu Ishi, announced on Wednesday that he is in favour of broadening the country's tax base rather than cutting taxes in order to stimulate Japan's ailing economy.

Although there have been growing calls for tax breaks from the business sector, Mr Ishi revealed that around 25% of individual taxpayers and 70% of companies 'hollow out' the tax system by avoiding taxes through various deductions and exemptions.

'A small scale tax cut will not be effective to boost the economy, and I believe the tax system should be neutral for the economy,' he explained earlier this week.

The Tax Commission chief then revealed that there could be drastic reforms on the table when the Commission meets again later this month: 'We want to discuss expanding the tax base of individual taxpayers by lowering the minimum taxable income,' he told journalists.

According to Mr Ishi, however, the Japanese public will not be kept in the dark regarding the progress of the Commission, which will be discussing topics such as the review of deductions. 'We will provide updates on major issues concerning tax reforms once every several months,' he promised.

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