Ministry and agency tax system reform requests focus on economic strength

Government agencies and ministries in Japan have submitted their tax system reform requests for fiscal 2027, with a focus on measures that could lead to a stronger economy, as per Prime Minister Sanae Takaichi's administration. The finalized tax reform package for the fiscal year beginning in April will be compiled later this year after the tax panels review the submitted requests.

The Industry Ministry proposed a system to defer corporate tax payments on profits from business sales, aimed at helping companies accumulate cash reserves during restructuring and supporting growth investments through new acquisitions using these funds. Rapidus, a Tokyo-based company aiming to mass-produce advanced semiconductors, received tax relief requests for in-kind contributions, involving the exchange of government-owned assets like factories for shares in the company.

The tax system for business succession, which offers relief from gift and inheritance taxes, may undergo significant changes to promote corporate capital spending and boost the earnings of small companies. The Industry Ministry, Welfare Ministry, and the Children and Families Agency jointly requested tax incentives for individuals utilizing housework helpers and babysitters to bolster the workforce by preventing job losses due to childcare and caregiving responsibilities.

The Children and Families Agency also advocated for preferential tax treatment for companies supporting child-rearing employees. They sought to abolish the gift tax exemption for lump-sum funds given for marriage and childbirth at the end of fiscal 2026. The Finance Ministry and Financial Services Agency requested tax benefits for Japanese government bonds held by individual investors to ensure stable placements.

The Land Ministry proposed measures to curb speculative transactions in the new condominium market to address the surge in prices. The Environment Ministry requested an exemption from hunting tax for hunters, following a series of bear attacks across the country.