Japanese Prime Minister Shinzo Abe said he aims to start cutting Japan’s corporate tax rate next year, after winning agreement from senior ruling party members on a measure to spur investment in the world’s third-largest economy.
Abe, speaking to reporters in Tokyo after a meeting with Japanese Minister of Finance Taro Aso and Japanese Minister of Economy Akira Amari, said the plan would bring the rate to below 30 percent in a few years. He said alternative revenue will be secured for the move, which requires approval from the Diet.
Amari told reporters that he had reached an agreement on Thursday evening with the tax commission head of Abe’s ruling Liberal Democratic Party.
The proposed cut, a key element of Abe’s “third arrow” of structural changes, comes as household budgets are squeezed by an increase in the sales levy in April. Failure to find extra funds risks worsening the world’s largest debt burden.
“It’s a big political step to show the direction of corporate tax cuts alongside the next planned sales-tax increase,” said Kyohei Morita, chief Japan economist at Barclays PLC in Tokyo. “It’s a step in the right direction, but short in terms of distance.”
The current corporate tax rate of about 35 percent is the second highest in the G7. It compares with levies of about 24 percent in South Korea and 23 percent in the UK, according to Japanese Ministry of Finance data.
Meanwhile, a Japanese government panel yesterday gave Abe more than 200 deregulation proposals across various sectors, including the health and agricultural fields, which are aimed at snipping Japan’s notorious red tape. Most are expected to be adopted later this month.
“We have received powerful proposals designed to boldly cut longstanding regulations,” Abe told the panel. “From now on, I would like to show results.”
Doubters say that despite his rhetoric, Abe will not be able to deliver a wider overhaul of the economy, including shaking up rigid labor markets and taking on a powerful agricultural sector that opposes free-trade deals.
Meanwhile, the Bank of Japan yesterday held off expanding its stimulus program and said the economy was recovering.
Policymakers agreed to hold off any further measures after a two-day meeting, but the central bank acknowledged that consumer demand and factory output had taken a hit after the April 1 tax hike, prior to which millions of shoppers went on a nationwide buying spree.
“Japan’s economy is expected to continue a moderate recovery as a trend, while it will be affected by the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike,” the bank said in a statement.
The central bank’s target of achieving 2 percent inflation by next year was also on course, it added.
Taiwanese firms have increased investment in the Philippines in recent years as Manila’s ties with Washington deepen and global supply chains continue to shift away from China, an expert at the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The Philippines had not been among Taiwanese investors’ top choices in Southeast Asia, CIER Taiwan ASEAN Studies Center director Kristy Hsu (徐遵慈) said at a seminar in Taipei. However, Taiwan’s investment in the country has grown significantly since the COVID-19 pandemic, reaching US $257 million last year, a high in recent years, she said. Although Taiwan’s total investment in the Philippines still lags
Intel Corp regards Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) as a longstanding partner, as the US chipmaker would continue outsourcing production of advanced chips to TSMC, Intel chief executive officer Lip-Bu Tan (陳立武) said yesterday. “I don’t look at people as competitors. I look at the collaboration... Nvidia is also, you know, a good friend,” Tan told a news conference following his keynote speech at the Computex trade show in Taipei. “It’s a very trusted partnership for us... We are a big, top customer for them, and we’re going to continue doing that,” he said, referring to TSMC, the world’s largest foundry
Artificial intelligence (AI) agents would supplant smartphones as the center of people’s digital lives, fundamentally reshaping personal devices and driving a major computing upgrade cycle, Qualcomm Inc CEO Cristiano Amon said yesterday. In his keynote speech for this year’s Computex trade show in Taipei, Amon said that the rise of "agentic AI" — AI systems capable of reasoning, planning and carrying out tasks autonomously — would transform how people interact with technology across phones, PCs, vehicles and wearable devices. Describing the technology as the next major evolution in computing, Amon said that "2026 is the year of agents.” For decades, smartphones have sat
Hon Hai Precision Industry Co (鴻海精密) yesterday said it would work with US chipmaker Intel Corp to jointly develop and deploy next-generation artificial intelligence (AI) infrastructure and intelligent computing platforms in a move to capture booming demand for AI computing systems. Hon Hai, also known as Foxconn Technology Group (富士康), said in a statement that the partnership would combine its global manufacturing scale, system integration expertise and AI data center deployment capabilities with Intel’s strengths in processor architecture, silicon technologies and software ecosystem. The companies said they plan to work on equipment used in AI data centers, including server racks powered by
RSS