The Japan Association of Corporate Executives (Keizai Doyukai) urged the Finance Ministry on Thursday to expand the current tax break for mortgages to help boost the economy.
A ministry official said that top executives of the group, headed by IBM Japan Ltd. Chairman Kakutaro Kitashiro, made the request in a meeting at a Tokyo hotel with Finance Minister Sadakazu Tanigaki and several other top officials.
The request comes as work on tax reforms for the next fiscal year is gaining momentum. The question of whether to extend the current tax break for mortgages beyond the yearend deadline is a focus of the debate.
The association proposed that the scope of the tax break be expanded, for example by offering it for a longer term, or for a second house, the official said.
The ministry officials noted the tax break is causing a considerable strain on Japan's finances, though the ministry is aware that the arrangement is meant to help bolster the economy. The officials said how to treat the system is still up for debate.
Under the current program, new homeowners with mortgages are given tax reductions of up to 5 million yen over 10 years, or 500,000 yen per year.
But the tax reduction is scheduled to be scaled back to a maximum of 1.5 million yen over six years in 2004.