Koizumi Expresses Resolve Over Tax Reform

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

21 January 2002

Speaking as the Government's Tax Commission began full scale discussions on Thursday, Japanese Prime Minister Junichiro Koizumi expressed his resolve to create a more equitable tax system, as well as rescuing the country's ailing economy, which has been hit hard by rising unemployment and corporate bankruptcies.

He called for a tax system in which: 'Everyone shoulders part of the tax burden, and everyone is rewarded from that.'

Hiromitsu Ishi, the head of the Tax Commission, revealed that he intends to select topics for detailed discussion in June, and intensify talks towards the end of the year. However, from indications already given, lowering the minimum taxable income, and reviewing the ratio of direct to indirect taxation are likely candidates for debate. But Finance Minister Masajuro Shiokawa stressed on Thursday that the emphasis would not be on increasing tax revenue, but on bringing 'more balance to the taxation system.'

The Government's plans have been criticized by the head of the New Conservative Party, Takeshi Noda, who warned last week that the country's poorer citizens may end up suffering under the double blow of lower income tax thresholds and higher consumption taxes.

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