The proposed tax reform bill, which was submitted to the Diet in December 2010 (as reported in TNS:2011-01-11:JP-1; TNS:2011-01-11:JP-2; TNS:2011-01-11:JP-3; TNS:2011-01-11:JP-4; TNS:2011-01-11:JP-5) will have no prospect of being passed in its current form, given the political situation where the ruling Democratic Party of Japan (DPJ) dominates the lower house while the opposition parties rule the upper house.
In the wake of the devastating March 11, 2011 earthquake and tsunami in the Tohoku area, the Japan Business Federation, a major advocate of the proposed national corporation tax rate reduction, is agreeable to the government suspending the proposed tax reform bill in order to secure funds for reconstruction.
Accordingly, the DPJ is likely to submit a revised tax reform bill, which will not include the proposed national corporation tax rate reduction, to the Diet.
Details will be reported subsequently.
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