Japan to Mull Tax Break for Small Biz with Big Growth Targets

Tokyo, Nov. 27 (Jiji Press)--Japan will consider an additional tax break for small and midsize companies with plans to increase their sales by at least 10 pct on average over a decade, informed sources said Wednesday.

In their talks on fiscal 2025 tax reform, the government and ruling bloc will study options such as granting an additional tax credit equivalent to 4 pct of capital investments to small and midsize companies with such sales plans.

The government hopes that a larger number of smaller companies will achieve annual sales of over 10 billion yen and lead regional economies. Of some 512,000 companies in the category of small and midsize businesses across the country, about 1,000 are expected to qualify for the envisaged tax break.

The industry ministry plans to extend and expand an existing tax break program for smaller companies, scheduled to expire at the end of fiscal 2024.

The program allows an immediate depreciation of the total amount of capital expenditures or provides a corporate tax break equivalent to 7 pct of such expenditures for companies scoring an annual return on investment of 5 pct or more. If the capital of an applicant company is 30 million yen or lower, the tax break rate rises to 10 pct.

[Copyright The Jiji Press, Ltd.]