Report: Japan To Cut Income Taxes
TOKYO (AP) _ The government and Prime Minister Keizo Obuchi’s ruling party have decided to cut income taxes by 20 percent across the board next fiscal year, Japanese newspapers reported Friday.
In a meeting Thursday, tax officials from the government and the Liberal Democratic Party agreed on the measures, which will include a maximum cut of $1,280, the Nihon Keizai newspaper reported.
They also agreed to cut residential taxes by 15 percent, or up to $340, said the paper, Japan’s leading business daily.
News of the cuts was also carried on the front pages of three other major Japanese newspapers.
But a Finance Ministry spokesman quoted Finance Minister Kiichi Miyazawa as saying that nothing concrete had been decided and that government and LDP tax officials were discussing details.
The spokesman said a decision will be announced by the end of next week. He spoke on condition of anonymity.
The government plans to send tax reform legislation to the next regular session of Parliament beginning in January.
The Nihon Keizai said the 1999 tax cuts are expected to total $34 billion.
Overall, however, benefits from tax cuts will remain unchanged from this year, when there was a one-time special tax cut worth the same amount.
The amount of the tax cuts for households with two children and annual income of $85,250 will come to $1,620.
But those with income of $68,200 will total $990, the daily said, adding that the proposed cuts for 1999 are weighted towards the wealthy.
The government and the ruling party had already decided to reduce the maximum income tax rate for next year from 50 percent to 37 percent and the highest residential tax rate from 15 percent to 13 percent.
The cuts are aimed at boosting consumer spending in Japan, which is in the midst of a nagging recession that has failed to respond to previous tax cut and fiscal stimulus measures.