Japan PM Takaichi plans tax cuts to boost consumption, Nikkei reports

Investing.com-- Japanese Prime Minister Sanae Takaichi will launch talks this week on a wide-ranging tax overhaul aimed at supporting investment and household spending while seeking new revenue sources to maintain fiscal discipline, the Nikkei reported on Tuesday.

According to the report, the ruling Liberal Democratic Party and coalition partner Japan Innovation Party will begin full discussions on next fiscal year’s tax reforms, with fuel tax cuts forming a key pillar.

Six parties have already agreed to abolish a gas tax surcharge by Dec. 31 and a diesel surcharge by April 1, a move expected to cost national and local governments 1.5 trillion yen ($9.7 billion) in lost revenue, the Nikkei reported.

To offset the shortfall, the government is considering scaling back corporate R&D tax breaks and pay-linked tax incentives, as well as raising taxes on wealthy individuals, the report said.

Takaichi is also exploring new tax incentives for domestic capital expenditure and regional business relocation, while expanding income tax deductions to ease living costs, the report added.