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29 Dec 2014
Japan's corporation tax rate set to be cut 2.51ppt in FY15 - Nomura
FXStreet (Bali) - Japan's corporation tax rate is set to be cut 2.51ppt in FY15, notes Nomura, a cut bigger than the bank expected.
Key Quotes
"On the evening of 26 December, Takeshi Noda, chairman of the LDP's Research Commission on the Tax System, submitted a corporation tax cut proposal to Prime Minister Shinzo Abe. Mr. Abe reportedly approved the proposal."
"While the tax cut has yet to be officially announced, the Nikkei and several other newspapers reported on 27 December that the standard corporate tax rate would be reduced in FY15 by 2.51ppt (from 34.62% to 32.11%), more than the 2ppt reduction we initially expected."
"The tax cut would reduce corporation tax revenues by some ¥1.2trn. The government is projecting ¥850bn in incremental tax receipts from alternative revenue sources (eg, expanded pro forma standard taxation), resulting in an effective net tax cut of about ¥300bn for companies (Figure 1)."
"The government is expected to cut the corporation tax rate to below 30% from FY16. Its FY15 tax reform proposal, to be released on 30 December, will present a roadmap for reduction of effective corporation tax rates over the next 2-3 years. According to media reports, the standard rate will be reduced in excess of 3ppt in FY15-16 combined.
Key Quotes
"On the evening of 26 December, Takeshi Noda, chairman of the LDP's Research Commission on the Tax System, submitted a corporation tax cut proposal to Prime Minister Shinzo Abe. Mr. Abe reportedly approved the proposal."
"While the tax cut has yet to be officially announced, the Nikkei and several other newspapers reported on 27 December that the standard corporate tax rate would be reduced in FY15 by 2.51ppt (from 34.62% to 32.11%), more than the 2ppt reduction we initially expected."
"The tax cut would reduce corporation tax revenues by some ¥1.2trn. The government is projecting ¥850bn in incremental tax receipts from alternative revenue sources (eg, expanded pro forma standard taxation), resulting in an effective net tax cut of about ¥300bn for companies (Figure 1)."
"The government is expected to cut the corporation tax rate to below 30% from FY16. Its FY15 tax reform proposal, to be released on 30 December, will present a roadmap for reduction of effective corporation tax rates over the next 2-3 years. According to media reports, the standard rate will be reduced in excess of 3ppt in FY15-16 combined.