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Japans tax-depreciation rules to be amended
November, 13th 2006

Masaaki Honma, chairman of the tax panel of Japans ministry of finance, said the government plans to revise depreciation rules that have changed little since the 1960s.

We are thinking of first working on the depreciation system, since it hasnt been changed for a while, said Honma, an Osaka University professor of economics, speaking on NHK television on Sunday.

The government is considering ways to make Japans rules on corporate asset depreciation internationally competitive by allowing for the full value of assets to be depreciated in less time. Honma also said the countrys value-added sales tax, called a consumption tax, may not be raised as much as expected. The Koizumi cabinet wanted the rate of increase in the consumption tax to be as small as possible, and the Abe administration has followed suit, Honma said. Tax revenue is increasing considerably, mostly through corporate income taxes, and the consumption tax increase may not need to be so big.

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