Since the bursting of "the bubble economy," Japanese industries have been constrained by Japan's high-cost economic structure and huge domestic demand-supply gap, which now amounts to over ten-trillion yen. The Japanese government has already boosted demand through economic stimulus measures and major tax reductions. In order to put Japan back on track towards stable economic development, it is now essential to strengthen industrial competitiveness, especially through supply-side restructuring.
The government should provide an adequate environment to encourage the supply-side restructuring; this restructuring should be based on individual corporate initiative to meet structural changes on the demand-side. Restructuring will lead to sound corporate operation and financial stability, contribute to Japan's industrial competitiveness, and ensure and expand employment.
Under the strong leadership of Prime Minister Keizo Obuchi, the Japanese government must take prompt actions to create an environment suitable for supply-side restructuring. Keidanren takes this opportunity to offer concrete proposals that will help create such an environment, particularly regarding legislative and tax measures that call for urgent attention.
Supply side restructuring, especially in the manufacturing sector, is essential for Japan to maintain and enhance its industrial competitiveness. In order to enable Japanese firms to quickly respond to an ever changing business environment, the government must make integrated efforts for the revision of legal and tax frameworks concerning the restructuring of business organizations and groups.
Global competition requires Japanese firms to respond quickly to economic and social changes through the restructuring of their own business operations. Firms need to reorganize their forms of enterprises through such means as spin-offs, exchanges of stock, and mergers. To facilitate such actions, prompt steps must be taken to establish the necessary laws and tax regulations.
| [1] | Establishment of Laws for Corporate Splits; Readjustment of Laws for Branching out companies; and Related Legislative Measures | |
| (1) | Establishment of laws for corporate splits | |
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| (2) | Tax measures regarding corporate splits | |
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| (3) | Readjustment of laws for branching out of companies | |
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| (4) | Tax measures regarding branching out of companies | |
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| [2] | Readjustment of Laws for Consolidation of Enterprises | |
| (1) | Early introduction of systems for exchange of stock and readjustment of tax laws | |
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| (2) | Review of anti-monopoly law | |
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| (3) | Readjustment of laws regarding M & A | |
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| (4) | Other legislative issues | |
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| [3] | Revision of the Stock Option System | |
| (1) | To be made available to managers/directors and employees of subsidiaries | |
| (2) | Increase in the striking price (currently 10 million yen a year) eligible for favorable tax treatment | |
| [4] | Introduction of a new law for Limited Liability Corporation | |
| (1) | Establishment of a business reorganization which all the investors assume limited liability and which will treated as a pass through entity for taxation purposes | |
The Japanese tax system is less favorable to business activities than the tax systems of other countries. A drastic review of the tax system is needed in order for Japanese firms to maintain and strengthen their international competitiveness.
Corporate tax reforms should enhance economic vitality. Currently, the introduction of a tax assessment system based on a business's size is being debated. Such an assessment, which merely aims to fill regional public coffers, will increase the fixed cost of business and obstruct economic revitalization. The ill effect that this type of an assessment system has had on economic activities in Germany and France has led to those two countries to reconsider their decision to use this means of tax assessment. Such a form of taxation also would hinder current efforts to simplify the tax system, and lighten the burden on tax payment and tax collection work.
| [1] | Early Introduction of Consolidated Tax Payment System | |
| (1) | Detailed discussions on earliest possible introduction of the system | |
| [2] | Review of Refunding of Loss Carry-back and Carry-over | |
| (1) | Earliest possible realization of refunding losses from the past two years and carrying-over for ten years | |
| [3] | Review of the Depreciation of Fixed Assets | |
| (1) | Reduction of the depreciation period reflecting economic conditions and overall simplification of the system | |
| (2) | Review of ceiling for the final depreciable limit (Approval of depreciation down to the nominal value | |
| [4] | Review of Taxation on Research and Development | |
| (1) | Treatment as a tax deductible expenses collectively | |
To encourage Japanese firms to resolve excess capacities and switch to new business activities, the government should introduce a bold and fixed-term tax policy.
| [1] | Tax Measures concerning Disposal of Excess Capacities and Changes of Business | |
| (1) | Introduction of an early depreciation system based on an plan for disposal of equipment | |
| (2) | Flexible application in the approval of tax-free debt, forgiveness to group companies | |
| [2] | Tax Measures to Facilitate Switch of Business | |
| (1) | Tax-free transfer at the time of purchasing new land, buildings, machinery and equipment to replace land under long-term ownership | |
In a free market economy, companies withdraw from the market if they have lost out to competition. Legal institutions, however, should assist companies in getting back on their feet if they have a reasonable potential for revitalization, and if restructuring efforts are successfully proceeding in カジノシークレット 退会ompany's industrial sector.
| [1] | Early Introduction of a New Bankruptcy Procedure with Provisions for Reorganization | |
| (1) | Early establishment of a new bankruptcy procedure with provisions for reorganization | |
| (2) | Facilitation of capital increases and reductions during the new bankruptcy procedure | |
| [2] | Readjustment of doe Debt Equity Swap | |
| (1) | Special measures to limit stock-holding by financial institutions | |
| [3] | Supply of New Money to Enterprises Undergoing Reorganization | |
| (1) | Expansion of low-interest financing by the Japan Development Bank | |
| (2) | Regarding small-to-medium-size enterprises, public guarantee is important to ensure necessary funds for カジノシークレット 退会ontinuation of business activities | |
In addition to the more efficient use of financial capital, the improvement of labor productivity is another key factor necessary to strengthen カジノシークレット 退会ompetitiveness of Japanese firms.
Firms have a social responsibility to make the utmost effort to create and secure employment. In the medium to long term, lower birthrates and the aging of the population will reduce the size of the labor force in Japan. Japanese firms, however, will not be able to succeed against global competition if they stick to カジノシークレット 退会onventional approach of maintaining redundant workers while switching to a new business.
In the field of employment, appropriate measures should be taken to overcome today's difficult situation. It is vital to prepare safety nets to protect against changes in the business environment. Particularly necessary are laws that will help resolve labor supply-and-demand imbalances, and a new employment insurance system which will emphasize improvement of vocational competence.
At the same time, positive measures should be taken to expand job opportunities; to assist the emergence of new businesses in the fields of medical care, public welfare, information and telecommunications; to invite foreign companies into Japan and promote investment in Japan.
| [1] | Positive Utilization of Private-sector Resources in Labor Market Readjustments | |
| (1) | Measures to liberalize placement services | |
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| (2) | Measures to liberalize manpower provision services | |
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| [2] | Review of Employment Insurance System | |
| (1) | Improvement of vocational competence and ability to switch jobs | |
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| (2) | Review of unemployment-benefit system (Payment must be proportional to urgency of need) | |
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| (3) | Discussion on how to subsidize employment readjustments | |
| [3] | Review of Wage System and Introduction of an Annuity | |
| (1) | Review of wage system (including retirement pay and pension) | |
| (2) | Introduction of an annuity in fiscal 2000 and readjustment of relevant laws including tax laws | |
| [1] | Healthcare Services for the Elderly and Disabled | |
| (1) | Ensuring of enough human resources for healthcareservices | |
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| (2) | Diversification of business entities providing healthcare services | |
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| [2] | Environmental readjustment in the field of information and telecommunications | |
| (1) | Further provision administrative information | |
| (2) | Promoting a more information-technology-based public sector, and outsourcing to the private sector | |
| (3) | Introduction of a flat rate system for household Internet-related communication fees | |
| (4) | Drastic review of laws related to the media and telecommunications, including enforcement of a new telecommunications law | |
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| [3] | Promotion of service businesses for households and companies and enterprises closely catering to regional needs | |
| (1) | Enforcement of support measures to promote service businesses for households and companies and enterprises that closely cater to regional needs | |
| [4] | Environment Readjustments for カジノシークレット 退会reation of New Industries and Enterprises | |
| (1) | Proposal of tax measures | |
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| [5] | Strengthening of NPOs' Social Basis | |
| (1) | Enforcement of various policies to strengthen the financial, human-resources, organizational basis for activities | |
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| [6] | Environment readjustment to accelerate invitation of foreign enterprises | |
| (1) | Accelerated abolition of regulations, deregulation and correction of an overall high-cost structure | |
| (2) | Discussions of favorable measures for invitation of foreign enterprises | |
Effective use of real estate such as former factory sites and increase of their market fluidity have vital importance to Japanese firms. Firms should promote closer collaboration with regional governments as well as with private developers at the stages of planing and execution of redevelopment projects. The government should flexibly apply regulations related to land utilization and provide public infrastructure that facilitates the projects.
| [1] | Promotion of model projects | |
| (1) | Positive promotion of model projects for housing and urban development | |
| (2) | Discussions on active utilization of various fund raising means (including PFI, project financing and securitization of real estate) | |
| (3) | Tax measures related to SPC | |
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| [2] | Functional Expansion of the Housing and Urban Development Corporation and Private Urban Development Organizations and Prior Acquisition of Land | |
| (1) | Centralization of information gathering through localautonomies, the Housing and Urban Development Corporation and private urban development organizations and presentation of development plans; positive approach to prior acquisition of land by the above-mentioned two organizations; and preparation of basis by local autonomies | |
| (2) | Establishment of information center for information on unused former factory sites | |
| [3] | Changes in Land-use Designations | |
| (1) | Flexible and prompt response of local autonomies to changes in zone designations | |
| (2) | Flexible use of the areas in redevelopment plans and promotion of prompt procedures | |
| [4] | Deregulation on Reutilization of Land as Factory Site | |
| (1) | Relaxation of カジノシークレット 退会onstruction Standards Law and its flexible enforcement | |
| (2) | Relaxation of the Factory Location Law (Greenery Standards), the Disaster Prevention Law targeted at petroleum industrial complexes, etc., and their flexible enforcement | |
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