By SATOSHI SHINDEN/ Staff Writer
October 15, 2020 at 18:58 JST
A ruling Liberal Democratic Party lawmaker is hinting at extending tax cuts to help families and businesses still reeling from the novel coronavirus pandemic.
Akira Amari, who serves as chairman of the LDP’s Research Commission on the Tax System, raised the prospect during an interview on Oct. 14 with The Asahi Shimbun and other media organizations.
But while he indicated that tax cuts due to expire over the next few months would likely be extended, he shot down an opposition proposal to lower the consumption tax rate from the current 10 percent to combat economic damage done by the COVID-19 pandemic.
“(The consumption tax) is a baseload revenue source designed to support peace of mind in the future, so it is not appropriate to treat it as a means to boost the economy,” Amari said.
The LDP’s research commission is currently considering what changes to make to the tax system from fiscal 2021.
The government created an exemption for the housing loan income tax deduction when the consumption tax rate was increased, and it extended the period for when the tax deduction could be used from 10 to 13 years. However, to utilize the deduction, homeowners must move into their new homes by the end of this year.
Amari pointed out that even major companies are cutting biannual bonuses to employees because of the havoc the pandemic has wreaked on the economy. He indicated the housing loan income tax deduction could be extended, considering the need to help families who planned to use those bonuses to repay their loans.
Amari said tax reductions for eco-friendly motor vehicles would also likely be extended beyond the expiration date of next spring, since the pandemic has also severely affected major automakers.
He suggested decision makers would ensure that any changes made to the various taxes being reviewed would not result in a large increase in overall tax revenues.
The assessments used to determine property taxes will also be revised in the next fiscal year for the first time in three years. The new assessment will be based on land values as of Jan. 1.
Commercial property owners in major urban areas may face an increase in how much they pay in taxes.
But Amari said the economic stagnation brought about by the pandemic will likely lead to a review over whether companies should have to face higher taxes.
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Akira Amari, the chairman of the ruling Liberal Democratic Party’s Research Commission on the Tax System (Asahi Shimbun file photo)
