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HOME  > Past issues  > 2012 October 24 - 30  > Business world: 10% consumption tax is still not enough
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2012 October 24 - 30 [POLITICS]

Business world: 10% consumption tax is still not enough

October 26, 2012
Business leaders at a Government Tax Commission meeting on October 25 demanded that the planned 10%-consumption tax be raised to around 15% in the mid-2020s while cutting corporate taxes to a 20% level.

It was only recently that the government cut the rate of corporate taxes to 38.01% from about 40%. Yet, the Japan Business Federation (Keidanren) said it wants a rate of 25%, and the Japan Chamber of Commerce and Industry (JCCI) sought somewhere between 20 and 30%.

Keidanren also requested more R&D tax breaks from which only specific large corporations can gain benefit.

Kubota Masakazu, Keidanren executive director, estimated that a possible loss in tax revenues will be 9-10 trillion yen if the government implements further cuts in the corporate tax.

Thanks to various preferential taxation, the top 50 companies paid a rate of only 23% in corporate tax on average in the FY 2011.

* * *

At this tax meeting, they also talked about the revival of after-hours contacts between bureaucrats or politicians and the private sector.

Senior Vice Minister of Health, Labor and Welfare Sakurai Mitsuru led off the discussion, saying, “Kasumigaseki (Japan’s administrative district) hasn’t had much energy because of no opportunity to frankly talk with business people.”

He then asked for opinions from the top business brass about a review of the National Public Service Ethics Act which now bans public employees from accepting invitations for wining-and-dining entertainment hosted by businesses.

Keidanren Kubota said, “Our talk over drinks in the evenings differs from what we discuss in the daytime. That will be good if we have a place where we can express our honest opinions.” Inoue Hiroyuki, special advisor for the JCCI, also gave a favorable reply, “When people drink alcohol, they show what they really have on their minds.”

The law was made in 1999 after frequent bribery scandals involving senior government officials caused a major controversy.

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