The government and ruling Democratic Party of Japan's Select Committee on the Taxation System on Tuesday agreed on a temporary tax hike plan to raise funds for the reconstruction of the Tohoku region following the March 11 disaster.
The original proposal called for raising 11.2 trillion yen in additional tax revenue through increasing income, corporate and tobacco taxes. The new proposal calls for reducing the amount raised through tax increases to 9.2 trillion yen and raising the rest from non-tax sources such as the government selling its stake in Japan Tobacco, which is expected to secure about 7 trillion yen, DPJ policy affairs chief Seiji Maehara told a news conference.
Committee members have been debating the tax hikes for most of September. Many lawmakers opposed an income and corporate tax hiker, saying it would make things worse for the Japanese economy.
The committee proposes raising the income tax by 4% from January 2013 for a period of 10 years. It also proposes raising the price of tobacco with a 2-yen tax per cigarette from around this time next year. A corporate tax cut, planned for next year, will be shelved for three years, leaving the current tax at the same level.© Japan Today