Panel proposes salary deduction cut for high-paid workers

November 21, 2017

TOKYO- The government's Tax Commission on Monday proposed reducing salary deductions for high-paid corporate employees, saying that Japan grants generous deductions to them compared with other major countries.

The commission, which advises Prime Minister Shinzo Abe, made the proposal in an interim report on the country's individual income taxation system compiled at a plenary meeting.

The deduction review is expected to be on the agenda of upcoming discussions in the government and ruling camp on the fiscal 2018 tax system reform package, to be compiled in mid-December this year.

Another expected agenda item is expansion of basic deductions for all taxpayers.

The commission also called for reviewing public pension and other income deductions for high-income pensioners.

Discussions within the ruling coalition of the Liberal Democratic Party and Komeito for the tax reform measures will start in full this week.

At a press conference, commission Chairman Minoru Nakazato called for "an income tax system that reflects public opinion well."

The commission's report noted the importance of resolving gaps in taxation based on income types, in light of the increasing number of freelance workers and other individual contractors.

The report added that it is appropriate to utilize basic deductions for adjusting taxation burdens. Jiji Press