TOKYO — Japan's new government plans to cut corporate tax closer to international norms as it tries to haul Asia's biggest economy out of a long slump, the economy minister said in a report Friday.
The government is aiming to cut tax on company earnings by five percentage points next fiscal year, from an effective 40 percent now, the Nikkei business daily quoted Economy, Trade and Industry Minister Masayuki Naoshima as saying.
"It's a fact that international corporate tax rates are 10 to 15 points lower than Japan's," said Naoshima, who is part of Prime Minister Naoto Kan's new cabinet sworn in this week.
"Over the medium term, the government will aim to bring the rate down to around the global standard," he said.
Japan has the industrialised world's highest levels of debt, and Naoshima said an enduring economic expansion would lead to higher tax receipts that in turn would make social security programmes sustainable.
"It is now the time to decide (on cutting corporate tax) for the sake of future economic vitality, employment and securing increased tax revenues," the minister said.
"Japan's economy has basically been in a slump for the past 20 years and people have been overwhelmed by a sense of stagnation."
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