June 28, 2010. Corporate taxation in Japan is to be reduced as part of the government’s attempts to drive up economic growth to two per cent, it has been reported.
The government of the world’s second-largest economy is keen to reduce by stages corporate taxation from its current 40 per cent level down to around 25 per cent in order to encourage inward investment.
Japan has been saddled with huge debt – the largest in the industrialised world – and deflation.
It hopes that lowering corporation tax, coupled with range of other fiscal measures, will help to pull the country out of its economic troubles.
Reuters reports that new prime minister Naoto Kan has said that raising sales tax from five per cent to ten per cent was being considered to help reduce debt.
The agency adds that economists believe the country needs to take stronger action, increasing it to as much as 20 per cent in years to come.
Naoto Kan took over the premiership of Japan after the previous prime minister Yukio Hatoyama resigned earlier in June.
