Tax Breaks To Spur Japan’s Rebuild
October 6, 2011 Taxation in Japan
TOKYO – Japan is looking at tax measures to boost the economic recovery of its disaster struck regions, with a series of proposed tax credits for establishing businesses and rebuilding efforts.
While speaking to the press on October 4th the senior vice finance minister of Japan Fumihiko Igarashi said that the Tax Commission of the Finance Ministry of Japan is considering several tax measures aimed at increase capital investment and economic growth in the country’s disaster struck regions.
In the Commission’s plans, the government would designate 220 municipal areas of Japan as being eligible to enjoy a set of updated tax rules, which are designed to directly increase capital investment and economic activity in these regions.
Under the proposed rules, businesses which are established in the chosen municipalities will receive tax credits equal to 10 percent of the annual salary of the workers hired. The enterprise will receive tax credits worth up to a maximum of 20 percent of their total corporate tax obligation. Businesses operating in the selected areas will also be eligible for tax credits on purchases of machinery and buildings.
Individual taxpayers will be granted a JPY 50 million tax credit if a local government body purchases their land or properties as part of a city planning or reconstruction project. Home owners who choose to repair their homes will be eligible for tax credits in proportion the amount they spend on home repairs.
In the coming weeks the Tax Commission is expected to further refine and expand its list of proposed tax changes, with the specific aim of confirming new measures to directly boost employment levels in the disaster struck areas of Japan.
Photo by narumi-lock