TOKYO: A Japanese government panel will discuss over the coming months whether to give tax breaks to companies that invest in areas considered strategically important, a change similar in intent to the U.S. Inflation Reduction Act.
The potential scheme would aim to make it more attractive for companies to make big-ticket investments in Japan by giving tax benefits for long-term projects with high startup and running costs.
The panel has been tasked with coming up with what Prime Minister Fumio Kishida has described as a “new form of capitalism”.
Tax breaks could be applied to investments in areas such as batteries, electric vehicles and semiconductor chips, a government official said, adding that the discussions would be held with the view that the scheme could be in place for about 10 years.
Japan’s ruling coalition would have the final say in whether to include any measures in the annual tax reform bill for this year, according to the official.
Headed by Kishida, the panel consists of cabinet ministers and 16 people from the private sector including academics and representatives from business lobbies, labour organisations and private companies.
Over the years, it has come up with a mix of policy suggestions such as plans to develop the startup market and to expand a stock investment programme for households.