Japan hammers out tax reform to boost wages

Japan's ruling party will review taxes on investments next year, a top party official said on Friday, as it and its coalition partner approved an annual reform plan aimed at encouraging pay increases to boost and distribute wealth.

The first annual tax reform plan under Prime Minister Fumio Kishida, who took office in October, focused on his policy objective of a "new capitalism" stoking a virtuous cycle of growth and wealth distribution to defeat deflation. "We must consider how to respond to the financial income tax from next year," said Yoichi Miyazawa, a veteran member of the upper house of parliament who heads the ruling Liberal Democratic Party's tax panel, referring to tax on investments.

He told reporters there was a lot of work yet to be done on tax reform. Since taking office, Kishida has been piling pressure on Japanese firms to raise wages, urging companies whose profits have returned to pre-pandemic levels to increase pay by 3% or more.

Published in The Express Tribune, December 11^th, 2021.

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