Tokyo,

Japanese Prime Minister Shinzo Abe's administration is considering ending an existing special tax break on wining and dining expenses at large companies at the end of fiscal 2019, informed sources said Saturday.

The Abe administration believes that the tax measure, which allows half of the expenses to be deducted from taxable income, has not been very effective in stimulating consumption, according to sources.

The scrapping of the tax break is expected to be included in a tax reform outline for fiscal 2020 that the government and the ruling parties are slated to adopt next month.

The special tax relief was introduced as a measure to alleviate the impact of the April 2014 consumption tax hike from 5 pct to 8 pct. The tax rate was raised to 10 pct last month.

The temporary measure, which has since been renewed every two years, is now viewed as unnecessary, as many large companies are spending less and less on wining and dining with business partners, according to a ruling party source.

Meanwhile, the government plans to maintain a similar tax break for small businesses, seeing that many of them are still using relatively much money for wining and dining.

The measure for small businesses with capital of 100 million yen or less, which account for over 90 pct of all domestic companies, is expected to be extended for two more years.

Jiji Press