April 30, 2014
In response to a request from Japanese Communist Party member of the House of Representatives Sasaki Kensho, the National Tax Agency calculated the percentage of taxes paid by corporations in 2012 based on their business returns, and it turns out that the larger their capital funds are, the smaller their share is in corporate taxes.
The agency’s data show that among business entities with less than one million yen in capital, their ratio of tax to declared income amount was 22.6%. In contrast, 19.6% was imposed on corporations capitalized at 10 billion yen or more.
Those at a level of 100-500 million yen in capital bore a tax rate of 27.0%. With this as a peak, lager-capital firms paid less in the tax share. As for tax consolidated group enterprises, their tax burden ratio fell by more than half to 13.3%.
The preferential tax measures for large corporations create these imbalances.
Prime Minister Abe Shinzo in the January economic forum in Davos declared that he will embark on corporate tax reforms. Accordingly, the government Council on Fiscal and Economic Policy and the government Tax Commission are discussing ways to give shape to further reduce corporate tax rates.
JCP Sasaki commented, “The agency calculation shows that tax rates for large corporations are already low and there is no justification for the government to further reduce the rates.”
“In the meantime,” he added, “People are suffering from the increase in the consumption tax rate to 8% which started this month. As if to add insult to injury, the government will raise the rate to 10% in October next year and is even considering the possibility of imposing more hikes. It is absolutely unacceptable to lower taxes only for corporations.”
The agency’s data show that among business entities with less than one million yen in capital, their ratio of tax to declared income amount was 22.6%. In contrast, 19.6% was imposed on corporations capitalized at 10 billion yen or more.
Those at a level of 100-500 million yen in capital bore a tax rate of 27.0%. With this as a peak, lager-capital firms paid less in the tax share. As for tax consolidated group enterprises, their tax burden ratio fell by more than half to 13.3%.
The preferential tax measures for large corporations create these imbalances.
Prime Minister Abe Shinzo in the January economic forum in Davos declared that he will embark on corporate tax reforms. Accordingly, the government Council on Fiscal and Economic Policy and the government Tax Commission are discussing ways to give shape to further reduce corporate tax rates.
JCP Sasaki commented, “The agency calculation shows that tax rates for large corporations are already low and there is no justification for the government to further reduce the rates.”
“In the meantime,” he added, “People are suffering from the increase in the consumption tax rate to 8% which started this month. As if to add insult to injury, the government will raise the rate to 10% in October next year and is even considering the possibility of imposing more hikes. It is absolutely unacceptable to lower taxes only for corporations.”
