Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Friday, December 3, 2010, from 10:54 a.m. to 11:03 a.m.)

[Questions & Answers]

Q.

On the topic of the taxation system, the Tax Commission is about to make its decision on the preferential taxation system for securities.  What do you think about the preliminary assessment results, which were harsh against the reduced tax rate?

A.

I am aware that the Tax Commission determined in the primary assessment that it would not accept the request to extend the reduced tax rate for securities.  At present, however, it is extremely important to overcome the recession due to deflation.  Although the Japanese yen has somewhat weakened and the U.S. economy has started to recover slightly, the employment situation in the United States remains tough.  The European economy is also on a slight upward trajectory, and stocks in Europe seem to have surged yesterday.  Stocks-securities-are fundamental to capitalism.  We are talking about the reduced tax rate for stocks in this context, as stated a number of times at press conferences by Shizuka Kamei, head of the People's New Party (Kokumin Shinto).  A 10 percent hike in the tax rate at this time goes against discussions on the reduced tax rate at 10 percent which have continued for about eight years.  Furthermore, the imposition of such tax corresponds to double taxation.  In a nutshell, since two decades ago, the logic has been that the imposition of income tax on dividends sourced from proceeds remaining after corporate tax has been paid by treating dividends as profits made from stocks would correspond to double taxation.  This has been the argument since the securities transaction tax was replaced with the tax on the acquisition of securities.  We intend to make a strong request for the reduction in securities tax.

(End)