Tax cut planned to boost economy

Japan will cut the tax rate on corporate income by 3.29 percentage points over two years to encourage companies to raise wages and boost investment, at a cost of about 400 billion yen ($4 billion) in revenue over the period. Company income tax will drop by 2.51 percentage points in the fiscal year starting April and a further 0.78 percentage points the next year, according to the ruling coalition’s tax plan, released last week in Tokyo. The government also plans tax-free investment accounts for children and an expansion of tax-free donations to relatives. The change follows a stimulus package announced a few weeks ago that boosted subsidies for the poor and support for small businesses.