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Major Tax Reforms in Recent Years


Socioeconomic situation

Income-based taxes

Consumption-based taxes

Property-based taxes, etc.

Tax reform
in 1989


Aging of demographic structure


Changes in industrial and employment structures


Rising and equalizing income level


Globalization of socioeconomy


Reduction of individual income tax
Easing of progressive tax rate structure


Income Tax
  Tax rate:15 brackets
ya00.gif (844 ???) 5 brackets


Inhabitants Tax
  Tax rate:14 brackets
ya00.gif (844 ???) 3 brackets
Increase in the exemptions


Reduction of corporation tax rate
ya00.gif (844 ???) 37.5%)

-Introduction of consumption tax

-Integration and streamlining of individual indirect taxes
(Abolition of 8 taxes including commodity tax)

-Reduction of inheritance tax
(Easing of tax rate structure, increase in basic deduction, etc.)
-Review of taxes on interests
(Abolition of preferred savings system)
-Imposition of taxes, in principle, on capital gains from transfer of stocks, etc.

Land tax
in 1991


Expanded differentials in value of properties due to soaring land prices, etc.


Enactment of the Basic Land Act (Introduction of the "basic concept" of the public nature of land)


-Introduction of Land Value Tax
-Rationalization of tax imposed on capital gains from transfer of land
-Rationalization and equalization of evaluation method employed by the Property Tax
-Overall review of the Special Land Holding tax, etc. (*)

Tax reform
in 1994


Accelerated aging of the demographic structure


Rising and equalizing of income level, and accumulation of assets in the economy

Reduction of individual income tax.
(Easing of progressive tax rate structure, increase in exemptions, etc)

-Reform of the consumption tax system
(Contraction of the special measures for medium- and small-sized enterprises, etc)
-Increase in the consumption tax rate
-Introduction of the local consump-tion tax
ya00.gif (844 ???) 5% (including local consumption tax))

Reduction of inheritance tax
(Easing of tax rate structure, expansion of special measures for small scale housing land, etc.)

(*) Taxation on land was reviewed and changed in FY 1996 and FY 1998 tax reforms.

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