The Cabinet of Prime Minister Naoto Kan on Thursday approved tax reform plans for the next fiscal year which will pave the way for Japans first corporate tax cut in 12 years to boost the economy and the introduction of an environment tax to fight global warming.The plans, proposed by the Tax Commission, a government panel headed by Finance Minister Yoshihiko Noda, also involve the extension of tax breaks for capital gains to revitalize Japanese stock markets while referring to some measures that will increase burdens on individuals, especially those with higher incomes.Also Thursday, the Cabinet approved the basic guidelines for the government to compile a new state budget, which mentioned Kans intention to cap key policy spending at around 71 trillion yen about $844 billion and new bond issuance at around 44 trillion yen, the same level as the previous year. The government will draft next week the budget for fiscal 2011 starting April."Japans growth has been faltering over the last 20 years," Kan said during a meeting of the commission. "Given the social doldrums, we had discussions on tax reforms by focusing on boosting employment and growth."Kan also reiterated his hope that the corporate tax cut would not end up only with a rise in retained earnings at companies, urging business leaders to "expand employment and raise salaries" with the money spared due to the tax cut.
Read the rest of the story: Japan to cut corporate tax, introduce levy on carbon emissions.