Key Facts
• On September 12, Keidanren released proposals for the FY2025 tax reforms.
• Warned that raising corporate tax rates could harm domestic investment and wage growth.
• Highlighted the introduction of the “Defense Special Corporate Tax” starting FY2025.
• Stated Japan’s corporate tax rate is already high compared to other major countries.
• Proposed maintaining and strengthening the R&D tax credit to promote innovation.
• Suggested bold tax measures like “immediate depreciation” for investment costs.
• Called for abolishing the “Environmental Performance Levy” on vehicle purchases.
• Recommended unifying “Automobile Tax” and “Automobile Weight Tax” as a long-term reform.
• Emphasized the need to enhance Japan’s competitiveness in attracting businesses.
Summary
Keidanren, Japan’s leading business federation, issued proposals for the FY2025 tax reforms, cautioning against corporate tax hikes. It argued that higher tax rates could deter domestic investment and wage increases, especially with the upcoming “Defense Special Corporate Tax.” Keidanren noted Japan’s corporate tax rate is already high globally and stressed the importance of maintaining competitiveness. The organization also advocated for strengthening R&D tax credits to foster innovation and proposed bold measures like immediate depreciation for investment costs. Additionally, it called for abolishing the “Environmental Performance Levy” and unifying vehicle-related taxes as part of long-term reforms. These measures aim to enhance Japan’s economic environment and attract more business investments.
