The Japan Business Federation (Nippon Keidanren) suggested to Finance Minister Yoshihiko Noda on Monday that a reduction in the corporate tax rate would be meaningless if it's accompanied by the termination of tax incentives, officials from the group and the Finance Ministry said.
If the ministry ends up abolishing some of the tax breaks, it may "lead to a decline in companies' competitiveness," said Hiromasa Yonekura, chairman of the lobby, at a meeting attended by senior officials from the two sides.
Noda stressed the importance of sticking to a pay-as-you-go scheme to secure resources to fund policies and said the government would like to discuss in a "positive" manner ways to expand the tax base, which will also benefit economic growth, the officials said.