Japan Mulls Tax Changes

January 11, 2013 Taxation in Japan

Taxes for Japanese taxpayersTOKYO – Japanese taxpayers could soon see their tax obligations undergo some significant changes, as the government looks at slashing taxes on food and hiking taxes for wealthy individuals.

Over the course of this week the Liberal Democratic Party of Japan and its coalition partner the New Komeito have held discussions to potential tax changes which could be enacted in Japan over the course of the next few years.

The main topic of discussion was the feasibility of reducing consumption taxes on essential foods and goods, and discussions were held on  whether the tax breaks would be offered to all taxpayers or only to low-income earners.

If approved, the reduced tax rate would be enacted shortly after the upcoming hike to the country’s consumption tax rate, which will be brought up from 5 percent to 10 percent by the end of 2015.

The parties discussed the possibility of funding the tax reduction by increasing the rate of income taxes for the highest income earners and potentially hiking taxes on luxury properties.

The full set of measures are expected to be finalized and drafted by the end of this month.

Photo by The 2-Belo