Japan Diet Enacts Bill to Spur Biz Investments at Home

Tokyo, May 29 (Jiji Press)–The Diet, Japan’s parliament, on Friday enacted a package of bills to support companies, including an industrial competitiveness enhancement law amendment to promote domestic investments through corporate tax cuts. The package was approved with a majority vote at a plenary meeting of the House of Councillors, the upper chamber of parliament. The House of Representatives, the lower chamber, gave its approval earlier this month. The revised industrial competitiveness law will allow companies to deduct 7 pct of their investments in facilities and equipment and 4 pct of spending on buildings from their corporate tax on condition that the deductions do not exceed 20 pct of the total amount of the tax. The tax incentive, available for all industries, is designed to promote bold investments to help realize a strong economy pursued by the administration of Prime Minister Sanae Takaichi. The deduction will be applicable for investments of 3.5 billion yen or more in machinery, plant buildings and others that are expected to yield a return of at least 15 pct. The minimum investment threshold is 500 million yen for small companies. Instead of the deduction, companies will also be able to choose to book all investments as depreciation costs in the initial year as an alternative way to curb tax burdens. The package also includes a bill to revise the trade insurance law to strengthen the financial basis of Nippon Export and Investment Insurance. This is aimed at supporting investments totaling up to 550 billion dollars in the United States that the Japanese government promised to the U.S. side in their tariff negotiations. END [Copyright The Jiji Press, Ltd.]