TOKYO (Reuters) – Japan will extend tax cuts on luxury cars and seek to shift its savings to investment in an annual tax code overhaul approved by the bloc. – managed last Friday.
The government will also raise corporate, income and cigarette taxes to double Japan’s defense spending to 2% of gross domestic product (GDP) by 2027 – response on China and North Korea’s missile launches.
Below are the key changes under the revised tax code, which will take effect in the next fiscal year starting in April 2023, once approved by parliament.
Japan will extend tax breaks on low-emission vehicles by the end of 2023, and will increase the level of emissions reductions required in several steps starting in 2024. its position until April 2026, will cover half of all news. car.
The government will also phase out gasoline-powered cars from 2025 with tax cuts given to the auto sector to help it overcome supply constraints.
Under a “new capitalism” initiative aimed at redistributing income, Prime Minister Fumio Kishida sought to shift Japan’s 2 quadrillion yen ($14.52 trillion) in real estate from the savings and for investments.
As part of this initiative, the government will implement a long-term program that provides discounts for household investments. In general, it will triple the limit on investments eligible for the tax break starting in 2024.
The profit tax rate is equal to the amount of income in Japan, unlike income tax, which is progressive.
In a symbolic effort to address income inequality, the government in 2025 will impose an additional tax on 200 to 300 people who earn more than 3 billion yen annually from investing in stocks and real estate.
The Kishida administration emphasized the need to nurture startups that could boost Japan’s economic growth.
The government will extend tax breaks to retail investors when buying and selling stocks in start-up companies.
Profits from the sale of startup shares will be exempt from income tax if reinvested in other businesses.
($1 = 137.7800 yen)
(Reporting by Tetsushi Kajimoto; Editing by Edmund Klamann and Jacqueline Wong)