LDP Proposes Outline For 1998 Tax Reform

On December 16, 1997, the ruling Liberal Democratic Party (LDP) made public its proposal for tax reform for the fiscal year 1998 which would allow approximately Y840 billion in tax cuts. The proposal includes, as its main features, drastic changes in corporate taxation including a 3% reduction in corporate income tax rates and substantial changes to a corporate tax base, easing of taxation of land and real estate to facilitate land transactions, and taxation of financial and securities transactions to promote a reform to the financial system. On December 17, 1997, the government's Tax System Research Council also submitted its recommendations for the 1998 tax reform which are similar in contents to the LDP proposal to Prime Minister Hashimoto. The government will draft and present bills for 1998 tax reform to the Diet session scheduled to be convened in the middle of January 1998 for enactment.