TAX NEWS - June 2010

Japan govt panel to urge sales tax rise

The Japanese government's tax panel plans to call for a rise in the sales tax and a higher ceiling on income tax as part of envisaged tax reform, the Asahi newspaper said on Wednesday.

The panel's draft proposal does not mention the specific size or timing of tax hikes, however, the newspaper said.

Tax revenues for the current fiscal year, ending next March, are projected at about 37 trillion yen ($404.5 billion), around the same as last year and less than half the size of the budget, which is around 92 trillion yen.

The draft describes public finances as in crisis with tax revenues having slumped due to the economy's downturn and cuts in income tax as part of stimulus efforts, the Asahi said.

The panel, which is due to announce its proposals later this month, will also call for bigger levies on the wealthy through inheritance tax, the paper said. ($1=91.46 Yen)