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Japan mulls asset-based taxes on rich to balance budget: sources

Wednesday, June 3, 2015 - 17:43

[TOKYO] Japan will consider expanding taxes on assets, people involved in the process said on Wednesday, in a bid to shift the tax burden more towards the wealthy amid an increasingly difficult effort to balance the budget.

The plan, to be included in an annual blueprint of fiscal and economic policy proposals at the end of the month, comes as doubts grow about the government's fiscal-reform promises even as Prime Minister Shinzo Abe's government is set to raise the national sales tax for the second time in three years in 2017.

"It's a revenue-boosting policy that puts the focus on assets rather than demarcating by income or age," one source said.

Mr Abe's advisory Council on Economic and Fiscal Policy will propose the changes for the fiscal year from April 2018, sceptical that the government will be able to achieve its ambitious goal by then of slashing the deficit to 1 per cent of gross domestic product from about 3.3 per cent now, the sources told Reuters.

The government has promised to return to a primary budget surplus in fiscal 2020.

At the same time, Mr Abe's push to raise taxes on consumption while cutting corporate taxes has prompted criticism that he is helping companies and the rich at the expense of the less well-off.

Under the current system, wealthy pensioners get the same social benefits as those with little or no assets.

Revisions would include the amount that people aged 75 and over pay for healthcare, as well as the scale of pension payouts, the sources said.

REUTERS