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HOME  > Past issues  > 2013 September 18 - 24  > Heavier burden in taxes for disaster recovery will end for businesses but continue for general public
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2013 September 18 - 24 [FINANCE]

Heavier burden in taxes for disaster recovery will end for businesses but continue for general public

September 22, 2013
The government is considering abolishing the disaster recovery tax being imposed on corporations and continuing to levy an extra burden in income and residential taxes on the general public to procure reconstruction funds.

This approach will release large enterprises from a tax burden even for disaster recovery while siphoning it from people.

Initially, the special corporate tax for reconstruction was to continue until March 2015, and the higher income and residential taxes were, respectively, to be maintained until December 2037 and March 2024.

In short, the period of burden on business entities is much shorter than that on the general public.

The government, in the first place, reduced effective corporate tax rates by 5% in exchange for the 10% increase in the so-called disaster recovery tax. In other words, the real corporate tax burden has been less than before the 2011 disaster occurred.

Now the Abe Cabinet intends to abolish the special corporate tax for reconstruction one year ahead of schedule and maintain the extra tax burden on the public despite another plan to increase the consumption tax rate in April 2014.

The then Prime Minister Noda Yoshihiko in September 2011 was saying in his policy speech that the entire generation would cooperate and share the burden of paying recovery. The Japan Business Federation (Nippon Keidanren) was also saying at that time that the financial community would agree to share a certain amount of the burden for the recovery.

Isoda Tomoko, working for a consumer cooperative in Fukushima, said her parents-in-law lost their house when it was hit by the tsunami, and that they still live in temporary housing. The father-in-law told her that he has to budget carefully due to the uncertain future outlook for their lives.

Isoda said that she cannot understand why the government is discontinuing the corporate recovery tax when forcing through higher taxes on the general public.
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