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Tax reform should take into account longer-term challenges

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Discussions have begun in the ruling Liberal Democratic Party’s Research Commission on the Tax System on fiscal 2021 tax reforms, which will be worked out at the end of this year.

The coronavirus crisis, which is not likely to end any time soon, has driven no small number of households and businesses into financial straits.

On the front end of the tax system, however, an enhancement of the tax credit for housing loans, which was introduced to coincide with the consumption tax rate hike in autumn last year, is expiring at the end of this year.

A reduction in the environmental performance tax for automobiles, and the tax credit for eco-friendly cars, will also expire next spring.

The burden of the fixed asset tax will also increase from the next fiscal year if it is calculated based on land prices that were rising before the onset of the COVID-19 pandemic.

The housing and auto industries play a major part in the economy. The fixed asset tax, which has to be paid even by those in deficit, weighs more heavily on businesses that are financially struggling........

© The Asahi Shimbun

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