Japan plans to debate capital gains tax hike next year – Media


People walk at a level crossing in the Shibuya shopping area, amid the coronavirus disease (COVID-19) pandemic, in Tokyo, Japan on August 7, 2021. REUTERS / Androniki Christodoulou

  • PM Kishida abandons financial tax review for now
  • Tax hikes could help close income gaps
  • Some investors worry about the impact on the stock market

TOKYO, Nov. 17 (Reuters) – The Japanese government and ruling party to consider debating capital gains tax hikes next year as part of efforts to address income disparities , Jiji News Agency reported.

The issue will be flagged as one of the main topics of debate in the outline of next year’s tax reform, which will be compiled by the government and the ruling party by the end of the year, said Jiji without identifying his sources.

Prime Minister Fumio Kishida, who has made wealth redistribution his main political agenda, previously raised the possibility of increasing Japanese taxes on capital gains and dividends.

But he kept his promise in October after being criticized for risking a downturn in the stock market, saying the government would not change taxes on investment income just yet. Read more

The investment income tax – imposed on capital gains on stocks and property, dividends and interest payments on Japanese government savings and bonds – is uniformly set at 20%, well below payroll tax rates of up to 45% in an effort to encourage investment.

The investment tax regime also helps reduce the overall burden on high-income people, who tend to earn more from investments, an issue discussed in the ruling party’s tax group debates last year as lawmakers seek to find a balance between fair taxation and the potential impacts on equities. markets.

While some investors fear that higher financial tax rates will hit the stock market and trigger a downward spiral that wipes out household and corporate wealth, others doubt that this could resolve income disparities.

“The fundamental problem is that there is a distortion in the financial tax burden,” a government official told Reuters on condition of anonymity. “In the current system, the more the rich earn from financial products, the less tax burdens they bear, which makes one wonder if this is fair.”

($ 1 = 114.9100 yen)

Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by Chris Reese, Sandra Maler and Shri Navaratnam

Our Standards: Thomson Reuters Trust Principles.


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