New rates for tax credits reserved for companies that increase wages. Announced the review of tax benefits for foreign tourists.
On December 14, the governing parties of Japan presented to the press the tax reform for 2024. In a low growth economic scenary, the new maneuver is in continuity with those of previous years and gives priority to the defense of employees’ wages, by remodeling tax credits to businesses and reducing the tax burden on taxpayers with uniform cuts.
Tax credits to encourage wage increases:
Also, in 2024 the priority of the Japanese government remains the support to the increase of the wages and therefore to the internal question of goods and services. With this goal in mind, the coalition parties announced the three-year extension of tax incentives to encourage payroll increases, with a reshaping of requirements and rates. In particular, will benefit from an additional 5% bonus in the form of tax credit, as explained by the slides published by the Japanese Ministry of Economy, companies “proactive in sustaining a good balance between child-raising and work and the active engagement of women in working life”. All in all, the highest rates of tax credit linked to wage growth were set at 35% for large and medium-sized enterprises and 45% for SMEs. Part of the government’s proposal are the “uniform” tax cuts of 30,000 yen (about 190 euros) on personal income tax and residence tax (63.2 euros). From these cuts, which will be operational from June 2024, however, were excluded people who declare incomes above 18 million yen (113 thousand euros), a figure corresponding to 20 million yen (126 thousand euros) for employees.
Measures for private households:
In a country that ages year after year, the financial maneuver provides for a reshaping of fiscal measures in support of families with children. While the government coalition has announced a reduction in the amounts of national and local exemptions for dependants aged between 16 and 18, on the other hand, it has written down the increase in family allowances and the increase in the mortgage tax credit for households with children.
Foreign tourism: revision of exemptions
The government aims to review the tax exemption system for foreign tourists. The aim is to prevent the resale on Japanese territory of duty-free goods that would be taken out of Japan. The new system will be defined within one year to avoid congestion of the airport system.