Keidanren Seeks Tax Cuts for Big Firms Helping Small Businesses

Tokyo, Sept. 15 (Jiji Press)–The Japan Business Federation, or Keidanren, has called for corporate tax breaks for large firms that support partner small businesses’ activities to develop human resources. The nation’s biggest business lobby included the measure in its proposals to be submitted to the government for its fiscal 2027 tax system reform package. Keidanren announced the proposals Monday. “It is effective to work on passing down skills and nurturing young employees across supply chains” in order to enhance the Japanese industries’ competitiveness, Keidanren said. Specifically, the group will request that costs for activities such as training programs and support for obtaining qualifications at partner companies and industry organizations be counted as expenses that can be excluded from taxable incomes or deducted from corporate taxes. Currently, such costs are treated as donations and therefore cannot be counted as deductible expenses in many cases. Keidanren noted that the effective corporate tax rate in Japan stands at 30.64 pct, the highest level among the Group of Seven major industrialized countries, due to the introduction in fiscal 2026 of a tax aimed at strengthening the nation’s defense capabilities. A tax hike that would negatively affect the virtuous cycle of investments and wage hikes should not be implemented, Keidanren said, apparently keeping in mind speculation that the corporate tax may be increased to cover revenue drops resulting from a planned consumption tax cut for food items. END [Copyright The Jiji Press, Ltd.]