Public employees may have to take a pay cut to show Japan is serious about reducing state and local government spending so that it can afford to lower tax rates, Economic and Fiscal Policy Minister Heizo Takenaka said.
"I want to reduce taxes. But we have to avoid falling into the red," Takenaka said on Asahi National Broadcasting Co's television program "Sunday Project."
"By cutting the salaries of government officials, we can cut spending," he said. "We must cut spending. This will have a knock-on effect on smaller governments too.
"Nobody wants to pay taxes. So when the government talks about cutting taxes, it's natural that people will ask, is it something the government is going to do properly or is it just putting on a show?"
Cutting government officials' salaries is one way to show Prime Minister Junichiro Koizumi's administration is serious about reducing expenditure, he said.
The government is currently discussing reforms to the tax system. Koizumi's economic panel wants personal and corporate taxes to be cut to help pull the world's second largest economy out of recession and says Japan should stop its borrowing binge that's expected to push the national debt to ?693 trillion (US$5.52 trillion), or 1.4 times gross domestic product, by March.
"The tax panel hasn't said anything about the decline in tax revenue from a tax reduction," Takenaka pointed out.
For this fiscal year, which started April 1, tax revenue may fall to a 14-year low of ?46.8 trillion yen, according to the ministry of finance.
Takenaka said that the government won't issue more bonds, instead stimulating the economy "through broad measures."
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Rick Cassidy, the chairman of Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) US subsidiary, TSMC Arizona Corp, plans to retire, but the company has yet to name a successor. After Cassidy made his intention to retire known, TSMC Arizona held a special general meeting and approved a resolution that Cassidy would not continue as chairman and would not remain as a director, TSMC said in a statement filed with the Taiwan Stock Exchange last night. The meeting also approved a plan to appoint TSMC Arizona president Rose Castanares as a director, the company said, adding that Cassidy has been named as an advisor
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
RSS