Abe buys support from Japanese business firms with early tax cut

Tokyo

JAPANESE Prime Minister Shinzo Abe's controlling Liberal Democratic Party (LDP) on Thursday agreed to reduce corporate taxes in Japan to below 30 per cent from next year, in the hope that this will stimulate corporate capital investment and wage increases and help get the economy moving forward again.

The LDP's decision to cut the standard corporate tax rate - from 32.11 per cent to 29.97 per cent with effect from next April, and then again to 29.74 per cent in fiscal 2018 - is part of an unwritten agreement with Japanese business whereby firms will try to respond with moves to spur investment and consumption.