The government and the ruling coalition on Thursday began studying the idea of fresh income tax cuts as an economic stimulus to compensate for the reduction or abolition of personal income tax cuts that have been in place since 1999, government officials said.
"We must consider some sort of measures if the abolition of the tax breaks will hurt the economy or if income tax reforms sharply increase the tax burden (on individuals)," a senior Finance Ministry official said.
The proposed reduction and eventual scrapping of the "proportional" tax cuts, introduced as part of an economic stimulus program compiled by the administration of the late Prime Minister Keizo Obuchi, has become a focus of ongoing debate about revising the nation's tax system for fiscal 2005, which starts next April.