Aso eyes substantial gift tax cut to spur consumption, economy+

KOCHI, Japan, March 28 Kyodo - Prime Minister Taro Aso said Saturday the government will consider making substantial gift tax cuts or exemptions to utilize the financial assets of the
elderly so as to stimulate consumption as part of an additional economic package.

Aso unveiled the plan in the city of Kochi, western Japan, as he answered
reporters' questions on the additional economic package being mulled by the
government and ruling parties.
''(The government) will study reducing or exempting the tax by designating a
period of years in which the elderly can give their money to their sons and
grandchildren to buy houses and cars,'' Aso said.
Aso plans to instruct Finance Minister Kaoru Yosano on Tuesday to work out the
additional economic package in expectation of a fiscal 2009 supplementary
budget to finance the pump-priming measures.
Aso apparently aims to feature the gift tax relief measure in the additional
economic package, but its effects may be limited as gift tax relief would only
benefit the well-off.
Pointing out that Japan's household assets amount to 1,400 trillion yen, Aso
said the money counts for nothing if it is not utilized.
When people buy houses and cars, these purchases can be subject to the tax cut
or exemption as long as the purchases are certified, he said.
Finance Minister Yosano is also in favor of including a gift tax reduction,
having said in the Diet that it is important to study how to utilize the
financial assets of the elderly.
Some lawmakers of the ruling Liberal Democratic Party have proposed increasing
basic deductions under the gift tax to 25 million yen a year from the current
1.1 million yen and enabling parents to make tax-free gifts to their children
to buy homes and automobiles.
==Kyodo
2009-03-28 22:32:40