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Corporate tax cut in Japan: Be careful what you wish for

Yet the idea of slashing the corporate tax, floated by the government earlier this month, has received a lukewarm reception from analysts and policymakers, because of doubts over whether it would unleash enough investment to justify the loss of revenue. Also read: Japan exports rise at fastest in 3 yrs, weak yen paying off To offset the economic impact of a politically unpopular plan to double the sales tax from 5 percent, Abe is considering, according to a Nikkei newspaper report on August 13, cutting the corporate tax rate to between 25 and 30 percent. Corporate leaders have long called for lower taxes as a measure to shore up Japan's waning economic competitiveness. Set at 38 percent for a large Tokyo-based corporation, Japan's corporate tax rate is well above the global average of 24 percent, as tracked by KPMG.
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