• Politics & Government

LDP Panel OKs Tax Reform Package

Yomiuri Shimbun file photo
The Liberal Democratic Party’s headquarters in Chiyoda Ward, Tokyo.

TOKYO (Jiji Press) — The tax panel of the ruling Liberal Democratic Party on Thursday morning approved a tax system reform package for fiscal 2024 that stopped short of clarifying when to start raising taxes to finance higher defense spending.

The LDP and its junior coalition partner, Komeito, are set to formally adopt their tax system reform package for the year from April later on Thursday.

The government plans to fund the planned increase in the country’s defense expenditures by raising corporate, tobacco and income taxes.

While the LDP’s package did not mention when to start the tax hikes, it included a plan to raise the tobacco tax on heat-not-burn tobacco products to the same level as that on combustible cigarettes.

The proposed fixed-amount tax cuts of ¥40,000 per person will be a one-time-only measure, according to the LDP’s package.

Still, the package called for considering measures to support households if necessary by taking into consideration wages, prices and other circumstances.

The LDP also seeks to review the size-based corporate tax imposed by prefectural governments on businesses with capital of ¥100 million or more.

In a bid to prevent companies from avoiding payments of the size-based tax by intentionally reducing their capital sizes, the LDP proposed that a new system be introduced to make companies with capital of less than ¥100 million subject to the taxation if their capital and capital surplus add up to over ¥1 billion.

The LDP package also included a measure to strengthen tax benefits for companies that are actively raising wages and promoting educational training and child-rearing support for their employees.