Category Taxation in Japan

Consumption Tax Issue Heats Up in Japan

January 19, 2011 Taxation in Japan

Watermark on Japanese 10,000 Yen Note, Macro PhotoConsumption tax rates have once again risen as a political battlefield in Japan, with the Prime Minister leading the charge for a raised tax rate and widespread reforms to the country’s tax system.

On January 18th Finance Minister of Japan Yoshihiko Noda announced that the Government would attempt to instate a range of sweeping tax system reforms by March 2012, in an attempt to increase long-term tax revenues, and reduce the national health-care and social security costs. The Minister did not reveal what changes are envisioned, but he explicitly stated that an increase to the current 5 percent consumption tax rate would be sought, along with an array of spending cuts.

On the same day, the Prime Minister Naoto Kan made an even more ambitious promise, saying that cross-party negotiations f...

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Japan’s Prime Minister Spurs Tax Cut Decision

September 10, 2010 Taxation in Japan

Angel Gurría, OECD Secretary-General, Official Visit to Tokyo, JapanJapan’s comparatively large corporate tax rate could soon edge towards levels seen in other developed economies if the Prime Minister’s economic acceleration and job creation plans are enacted.

On September 9th Prime Minister Naoto Kan instructed the Japanese Cabinet to make a decision on the possibility of cutting the national corporate tax rate cut by the end of the year. He also instructed a panel at the Tax Commission to begin a new investigations into tax system rebalances which could be used to fund the rate drop.

Currently the country’s effective corporate tax rate exceeds 40 percent, compared to an average of 26.3 percent across the countries of the Organization of Economic Cooperation and Development (OECD). Both the Ministry of Economy, Trade and Industry and the Prime Mini...

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IMF Backs Japanese Prime Minister on Tax Reform

July 15, 2010 Taxation in Japan

Asia21_026Japanese taxpayers could experience a significant increase to the national Sales Tax rate in the near future, after the International Monetary Fund called for fiscal reforms.

Japan’s political climate has been turbulent recently following the Prime Minister’s Sales Tax rate hike proposal. Naoto Kan claimed that a doubling of the current 5 percent Sales Tax rate would be an ideal step in addressing the nation’s ballooning debts, which have reached 218 percent of GDP. The tax issue was seen as a significant reason behind Naoto Kan’s political party suffering a defeat at the recent Japan Upper House elections...

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Tax Hikes Reason for Japanese Election Loss

July 12, 2010 Taxation in Japan

Korea-Japan summit talks in Toronto, CanadaJapan’s ruling political party has suffered a major setback in its plan to instate tax hikes, after experiencing a defeat at the national Upper House elections.

According to media exit-polls, the Democratic Party of Japan (DPJ) has won fewer than 50 seats of the contested 121 seats in the Upper House Government elections, held on June 11th. The result has been attributed to the party’s proposal of doubling the national sales tax rate to a level of 10 percent. The DPJ previously stated that it was aiming at attaining at least 54 seats. Official election results, scheduled for release by June 13th, are expected to confirm that the DPJ will hold a maximum of 110 seats of the total 242 Upper House seats.

Naoto Kan, Prime Minister of Japan and DPJ leader, has stated that he intends to stay ...

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Japan Considering Sales Tax Hike

June 21, 2010 Taxation in Japan

Watermark on Japanese 10,000 Yen Note, Macro PhotoThe Japanese Government is considering doubling the national Sales Tax rate, in order to curb the national public debt while retaining current levels of public services.

Late last week Japanese Prime Minister Naoto Kan declared the need for the Japanese Government to carryout comprehensive reforms to the nation’s tax system and drastic cuts to public spending, and called opposition parliamentary members to join in supporting his proposal. Naoto Kan also revealed that he is willing to consider doubling the current 5 percent national Sales Tax.

The Prime Minister revealed that an exact tax rate will be finalized by March 2011, and for the purposes of initial investigations, the 10 percent rate will be used as a “reference point”...

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