tax

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Tax commission starts discussing tax increase on workers

The government Tax Commission, an advisory panel to the prime minister, is calling for the fixed-rate income and residential tax cuts to be abolished by FY 2007.

On October 25, the Tax Commission started discussing "tax reform" for FY 2006. At a press conference later in the day, Commission Chair Ishi Hiromitsu stated, "At this point, there are no grounds for having to extend the fixed-rate tax reduction."

He also said that an increase in the consumption tax rate to 10 percent or higher will be unavoidable.

Key items that the Commission is considering include corporate tax reductions to promote their IT investment as well as research and development.

The Tax Commission proposed abolishing the fixed-rate tax cuts in June. This would mean a tax increase on salaried workers. During the September 11 general election campaign, the Liberal Democratic Party stressed that it does not agree with the Commission's proposal. But once the LDP won the election in a landslide, Finance Minister Tanigaki Sadakazu began preaching that the fixed-rate tax cut system needs to be reviewed. -- Akahata, October 26, 2005