The Japanese government is likely to cut the effective corporate tax rate to below 30% in fiscal 2016 from April, a year earlier than planned, people in the government and coalition parties told Reuters Saturday. Relevant ministries and agencies are now in talks to slash the rate to a level between 29.5% and 30% in April, aiming to spur capital spending and boost wages, they said. The government initially planned to slash the rate to below 30% in fiscal 2017 after reducing it to 31.33% from the current 32.11% in fiscal 2016. Keidanren, Japan’s biggest business lobby, has been pressing the government to quickly lower the effective corporate tax rate–among the developed world’s highest–to below 30%. The government will consider expanding size-based corporate taxes, which are levied not only on profitable companies but also loss-making ones, although some critics say such a measure would actually increase the burdens on business.
