Japan’s ruling Liberal Democrat Party has approved a tax reform package that will cut corporate rates for companies who increase employee wages and productivity.
A news report on the proposed reforms by Tax-News.com indicated that companies that increase employee wages by three percent would be able to reduce their corporate tax rate down to 25 percent.
Similarly, a further cut to 20 percent would be possible for companies investing into improving their productivity or engaging in digitalization. This tax relief would be introduced for three years only, beginning next fiscal year, which begins in April.
In addition, the news report confirmed that the government also approved plans to increase duties on tobacco products from October 2018, as well as implement a new departure tax of JPY1,000 (USD8.84) per person from January 2019.
Income taxes will rise from January 2020 for workers earning more than JPY8.5m (USD75,118) per year, and tax deductions for company employees will be reduced. The changes were announced in a tax reform package approved on December 14.