Japanese Prime Minister Fumio Kishida yesterday said that he would not seek to change the country’s taxes on capital gains and dividends, as he intends to pursue other steps for better wealth distribution, such as raising wages of medical workers.
Kishida, who has vowed to rectify wealth disparities, previously said that reviewing those taxes would be an option in addressing income gaps.
Kishida’s new stance indicates his concern about jitters in the stock market caused by the prospects of higher tax levies.
Kishida took the top job in the world’s third-largest economy on Monday last week, replacing Yoshihide Suga, who had seen his support undermined by surging COVID-19 infections.
“I have no plan to touch the financial income tax for the time being... There are many other things to tackle first,” Kishida told a news program on commercial broadcaster Fuji Television Network. “Misunderstanding is spreading that I may do it soon. That will give unnecessary worry to people concerned, if not dispelled firmly.”
Investors have voiced concern that the new prime minister might press ahead with capital-gains tax increases, signaling a turnaround from investor-friendly economic policies pursued by Japan’s longest-serving prime minister, Shinzo Abe, from 2013 to last year.
Some analysts had called for raising Japan’s tax levied on investment income from the current 20 percent to raise more from the rich and fund steps to support low-income households.
Others were skeptical about the effects such tax increases might have on correcting wealth disparities.
Kishida’s Liberal Democratic Party makes no mention of reviewing taxes on capital gains and dividends in a draft campaign platform for the Oct. 31 general elections obtained by Reuters.
Investors had been concerned about any negative effect the higher tax rates could have on stock markets, which could cool local investment and drive away foreign investors.
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