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Chukeiren urges tax reform for economic vitality.

NAGOYA, June 3 Kyodo

(EDS: ADDING COMMENTS BY CHUKEIREN CHAIRMAN)

The Chubu Economic Federation (Chukeiren) called on the government Monday to reform Japan's tax system as a step to help spur business activity.

In a package of measures to apply the brakes on Japan's industrial hollowing-out caused by an exodus of domestic companies, Chukeiren noted that companies tend to locate their manufacturing outlets in countries where tax breaks are available.

The Japanese government therefore should consider corporate and other tax breaks to attract both Japanese and overseas businesses, the federation said.

The federation, which groups more than 800 companies and organizations active in the Chubu region in central Japan, also urged the government to step up deregulation, warning that Japan would be left behind in the global economy unless structural reforms, such as narrowing of price gaps between Japan and other countries, are implemented promptly.

Chukeiren plans to present the package to the ruling Liberal Democratic Party and the Ministry of Economy, Trade and Industry.

Such major manufacturers as Toyota Motor Corp. are headquartered in the Chubu region that consists of Aichi, Gifu, Mie, Shizuoka and Nagano prefectures.

In line with calls in the package, Chukeiren will set up a council on June 21 to promote efforts to attract businesses to the region, Chairman Hiroji Ota said at a press conference.

The council will consist of the five prefectural governors as well as business leaders and scholars in the region, said Ota, who is the chairman of Chubu Electric Power Co.

With regard to U.S. credit-rating agency Moody's Investors Service Inc.'s recent downgrade of its rating on Japanese government bonds, Ota said it should be seen as a warning over the slow progress of Japan's structural reforms led by Prime Minister Junichiro Koizumi.
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Publication:Japan Weekly Monitor
Date:Jun 10, 2002
Words:295
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