On Thursday, Japanese Prime Minister Fumio Kishida revealed a plan to make Japan’s tax relief system for small-batch investments a permanent program to attract more individual assets to the markets.
It is “essential” to establish a permanent tax exemption system for investment proceeds, Kishida said in a speech given on the New York Stock Exchange, the world’s largest, to encourage more foreign investment in Japan.
Kishida said such tax incentives are necessary because Japan has 2,000 trillion yen in personal financial assets but “only about 10 percent” is invested in stocks.
Since taking office last October, Kishida has proposed a “new form of capitalism” that emphasizes the redistribution of wealth.
Kishida said the potential of the proposed tax-exempt scheme should be as powerful as that of Japanese baseball star Shohei Ohtani of the Los Angeles Angels, as it could help the Japanese economy achieve “growth and sustainability.”
Under the incentive scheme known as NISA, holders of designated accounts with financial institutions are exempt from taxes on investment income until 2042. NISA stands for Nippon Individual Savings Account.
Kishida has proposed to remove the deadline in the speech, but the details will be left for further deliberation by the Finance Ministry and a panel in the tax system of his ruling Liberal Democratic Party.
Kishida also said in the speech that Japan will expand tax incentives to improve the environment for startups.