Japan Eyes Tax Reward for Wage Hikes

December 4, 2017 Taxation in Japan

japanese-yen-notes-757cfTOKYO – Wage hikes and robots could soon help Japanese companies slash their tax obligations.

The government of Japan is evaluating potential new tax break which could see the business tax burden reduced by nearly a third.

Japan has spent the last several years taking steps to reduce the level of corporate income tax faced by businesses, which is expected to fall to as little as 29.74 percent in the business year starting April 2018.

However, the government is now looking at reducing the rate to as low as 20 percent.

The reduction will come in the form of deductions made available to businesses which actively invest in human resources, such as wage hikes and training programs.

Some deductions will also be available to businesses which invest in technologies to increase output and productivity, such as artificial intelligence and the “internet of things”.

It is expected that if such a tax measure was implemented, then it would encourage businesses to become more efficient and pay more wages to individuals, ultimately boosting economic productivity and taxpayers’ lifestyles.