Japan will propose revising tax pacts with other Asian economies at a meeting this weekend, hoping that lower levies will boost cross-border business and investment, the Finance Ministry said Wednesday.
Finance Minister Sadakazu Tanigaki is expected to pitch the proposal when finance ministers from the 10-member Association of Southeast Asian Nations -- along with those from Japan, China, and South Korea -- gather at South Korea's southern resort island of Cheju on Saturday.
ASEAN consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
"Such revisions will likely back up Japanese firms that have already been doing business overseas as well as those planning to widen business in the region in the future," a ministry official said.
The plan follows Tanigaki's statement in March that the country hopes to revise tax accords with Asian and European nations based on the revised U.S.-Japan bilateral tax treaty, which took effect March 30.
Tanigaki stated that the region needs long-term stable investment by the private sector instead of speculative short-term funds.
The government aims to lower or abolish the taxes -- ranging from 5 percent to 20 percent -- that foreign subsidiaries pay to host countries when they pay dividends to their parent firms at home.
It also wants to cut the taxes on royalties, ranging from 10 percent to 25 percent.
The ministry has already raised the proposal at unofficial talks with countries such as China. It has also unofficially discussed the issue with Thailand and the Philippines, both of which are engaged in free-trade agreement negotiations with Japan.