TOKYO, Oct. 1 (Xinhua) -- The Japanese government pledged to adopt large-scale tax cuts for corporate sector and new infrastructure investment along with Prime Minister Shinzo Abe's announcement to increase sales tax as planned next April, local media reported.
According to Kyodo News, Abe's Cabinet approved an economic stimulus package worth 6 trillion yen (61.05 billion U.S. dollars), including 1 trillion yen in tax reductions to lift business investment and cash benefits for low-income earners.
During a meeting with executives from the ruling coalition at his office Tuesday afternoon, Abe said that he will raise Japan's sales tax rate in April 2014 to 8 percent from the current 5 percent as planned.
He also said the economic stimulus package would "moderate the possible negative effects as much as possible and help the Japanese economy recover and return to a growth path again soon." Details of the package will be determined in early December.
The government decided to implement 730 billion yen in tax cuts to stimulate capital spending, while providing 160 billion yen in tax breaks to corporates willing to increase wages for their workers.
It also plans to end a special corporate tax surcharge introduced to fund reconstruction work following the March 2011 earthquake and tsunami one year earlier than scheduled at the end of next March.
The withdrawal of the surcharge would reduce the current corporate tax rate of around 38 percent on Tokyo-based companies by about 2 percentage points.
In consideration of low-income individuals, Abe's administration plans to give 10,000 yen per person to households exempted from the local residence tax and 15,000 yen per person to low-income households that receive pensions or child allowances.
It decided to give 110 billion yen in tax cuts to those who buy homes using housing loans.