Japan Eyes Tax Benefits for Retail JGBs

Tokyo, Aug. 25 (Jiji Press)–Japan’s Finance Ministry and the Financial Services Agency plan to include tax incentives for retail Japanese government bonds in their fiscal 2027 tax reform proposals, informed sources said Tuesday. The ministry and the agency aim to attract more individual investors amid a decline in the Bank of Japan’s JGB purchases and to help maintain stable JGB issuance. Concrete discussions are expected to take place toward the tax reform package to be compiled by the government and the ruling parties at the end of this year. Individual investors account for only about 2 pct of total JGB holders. “We must improve the attractiveness of retail JGBs,” Finance Minister Satsuki Katayama told a press conference Tuesday. “We want a wide range of investors to hold government bonds.” Some officials of the ruling and opposition parties are considering including JGBs for individual investors among products eligible for the Nippon Individual Savings Account, or NISA, tax-exempt small-lot investment program, or reducing related inheritance taxes. However, some lawmakers are cautious about the move, claiming that principal-guaranteed JGBs run counter to the purpose of NISA, which has been promoted under the banner “from savings to investment.” They are also wary of criticism that the envisaged tax incentives could be seen as preferential treatment for high-income earners. “There are various points to be discussed,” Katayama said. “We want to have a careful discussion with related parties.” END [Copyright The Jiji Press, Ltd.]