TOKYO, Dec. 14 (Xinhua) -- Japan's ruling coalition on Thursday approved an income tax reform package for fiscal year 2018 (April 1, 2018-March 31, 2019) that will see income taxes raise for some salaried workers and corporate taxes cut for companies raising wages and increasing investments.
The Liberal Democratic Party (LDP) and its coalition partner Komeito party said the tax reform package will better suit the nation's modern working environment.
Under the new reforms, salaried workers who earn more than 8.5 million yen (75,480 U.S. dollars) per year will pay higher income taxes from January 2020 and tax thresholds for all taxpayers will be increased while employment income and pension deductions will be reduced.
Large companies will be eligible for a tax credit of up to 20 percent of increased salary payments, if they hike pay by 3 percent or more, and small and medium-sized companies will qualify for credit of up to 25 percent if they increase wages by more than 2.5 percent.
The government will increase tax rates on cigarettes by 3 yen per cigarette over a four year period, and on hybrid tobacco products in stages, starting from October 2018.
A new departure tax will be introduced as part of the reforms ahead of the 2020 Tokyo Olympics and Paralympic Games that will see each person departing Japan pay 1,000 yen (8.88 U.S. dollars) from Jan. 7, 2019.
The ruling coalition's reform package also includes a new tax for forest management and conservation tax that will be introduced in fiscal 2024.
