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Japan's ruling block approves tax reforms to spur demand

Source: Xinhua| 2018-12-15 00:06:22|Editor: Mu Xuequan
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TOKYO, Dec. 14 (Xinhua) -- Japan's ruling camp approved Friday a tax reform package for fiscal 2019 to underpin domestic demand following a consumption tax hike scheduled for October next year.

Under the package, tax deductions for people with home mortgages will be extended from the current 10 years to 13 years.

Taxes on car ownership will also be reduced, which will allow a person buying a new car after Oct. 1 next year to save 1,000 to 4,500 yen (9 to 40 U.S. dollars) annually.

Other envisioned measures include giving single parents who have never been married and have income below a certain level residential tax cuts as well as additional benefits.

The reforms are aimed at spurring domestic demands, including those on homes and cars, to offset the impacts by the government's plan to raise the consumption tax from the current 8 percent to 10 percent from Oct. 2019.

Meanwhile, the measures are also expected to raise further concerns over Japan's poor fiscal health as they are estimated to reduce tax revenues of central and municipal governments by as much as 167 billion yen (1.5 billion U.S. dollars).

The Japanese government is burdened with arrears that stand as the highest in the industrialized world, amounting to more than twice the size of Japan's economy.

Japanese Prime Minister Shinzo Abe has announced a platform of using revenue generated by the planned 2019 consumption tax hike for welfare policies instead of reducing the nation's monumental public debt, and has delayed the timing of achieving the country's fiscal rehabilitation goal by five years to fiscal 2025.

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