Japan Implementation Tax Cuts and Quantitative Easing

To stimulate the economy, the Japanese government as if the U.S. government’s “fans.” United States to implement the second time quantitative easing, the Japanese are also not lagging behind, immediately follow up; recently in the U.S. do a full swing of the tax cuts, has become the latest Japanese government policy choices. 14 overseas media reports that the Japanese government has agreed to share the capital gains tax concessions for two years. A day earlier, the government also announced that effective tax rate of corporation tax will be reduced 5%, to reduce the burden on Japanese companies to stimulate economic vitality.

Japanese Finance Minister and the national strategy to play wild Tianjia Yan Yuen Minister Koizumi leaves in corporate tax to the Government’s proposal to cut 3% or 5%, Japanese Prime Minister Naoto Kan on the 13th green light, decided to have dropped to 5%.

According to the Japanese Finance Ministry data, including tax and local taxes, including, Japan, the current corporate tax rate is 40.69% effective in developed countries top. Reduce the corporate tax would help to achieve Kan September this year, medium-term economic growth plans to set targets.

“And the international standard is too high compared to Japan, down 5 percentage points is to lower the effective corporate tax rate of the first step is to create world-class investment environment.” Japan’s Economy and Industry Minister Wang Tai Tian Zhang said in the announcement: “This is to prevent companies to move overseas, and increase domestic investment, revitalize the economy. ”

Naoto Kan, said that the economic sector hopes to reduce the tax burden for them to increase domestic investment, expand employment and increase in salary to help Japan out of deflation state.

However, 5% corporate tax cut will generate about 1.5 trillion yen in financial “gap”, and the Japanese Ministry of Economy estimates that only 600 billion yen supplementary sources of income. Japanese government tax investigation of the 13 decided to inheritance tax exemption limit from the current 50 million yen down to 3,000 million yen, the resulting tax increase of about 260 billion yen will be used to supplement corporate tax cut after some of the financial ” gap. ” Potential “filled” also includes financial resources may be adjusted after-tax securities offer new taxes and new environmental taxes.

In addition, the Japanese financial ministers from the 14 See Zhuangsan Lang said the agreement was finance minister, will the stock capital gains tax concessions for two years. Japan in 2003 and the introduction of the preferential measures, and has been twice extended, to attract retail investors into the stock market. Affected by economic weakness and deflation, Japan’s stock market performance has been dismal. End of next year the Japanese government planned to abolish preferential measures, but the securities industry and attracted strong opposition from the FSA.

Affiliates, the Japanese government last week said the Economic Planning Association, the world’s third largest economy may be shrinking economic growth in this quarter, because of stimulus fade. Data show that Japan’s exports grew 7.8% in October, the slowest growth rate this year, industrial production fell 5 months straight, the unemployment rate rose to 5.1%.

In addition, the anti-inflation bond fund manager is expected to show Japan the next 5 years the average price decrease of 0.6% per year in 2018 prices fell by 0.4%. Japanese government data showed prices in the country in October fell 0.6% over last year, has 20 consecutive months of decline.

Japan’s Nikkei 225 index closed up 0.2% from 14 overseas investor buying offer help. Large-scale foreign investment has been lagging behind the performance of Japanese stocks to buy and promote the Nikkei 225 index rose more than 12% over the past six weeks.

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