Category Taxation in Japan

Japan’s Leading Parties May Reach Agreement on Tax

March 11, 2011 Taxation in Japan

Naoto Kan - World Economic Forum Annual Meeting 2011Japan’s long running political stalemate over taxation issues is showing signs of progress, after the Liberal Democratic Party and the Democratic Party of Japan held talks regarding extensions for a number of soon to be expired tax breaks.

On March 11th a meeting was held between leaders of Japan’s major political parties, the ruling Democratic Party of Japan (DPJ) and the opposition Liberal Democratic Party (LDP), to discuss a number of tax breaks that are set to expire at the end of March. The meeting concluded with the LDP indicating a potential willingness to support the DPJ’s proposed short-term extensions to the tax breaks...

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Japanese PM Attempts to Find More Supporters for Tax Plans

February 4, 2011 Taxation in Japan

Naoto Kan - World Economic Forum Annual Meeting 2011The Prime Minister of Japan has clarified his position on future tax reforms, in an attempt to seek more support among leading opposition parties.

Only days before a meeting of a Japanese government panel is scheduled to take place, further disagreement are arising between Japan’s two most prominent political parties (Democratic Party of Japan and opposition Liberal Democratic Party) as they continue to clash over the future of the country’s tax system. As it was informed the meeting, dedicated to discussing potential reforms to the country’s tax system, will take place on February 5th. The primary issues up for initial discussions are the final round of discussions regarding a rise to the national consumption tax rate and a reform of the country’s social security system.

Speaking at t...

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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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