Japan’s Tax on Investment Income

TOKYO (Reuters) – Japanese Prime Minister Shigeru Ishiba stated on Monday that he currently has no plans to consider increasing the tax on investment income.

“At present, I am not thinking of exploring this issue specifically,” Ishiba told parliament when asked if his government might raise the tax rate.

Prior to winning the ruling party’s leadership race and becoming premier, Ishiba had indicated that he would strengthen taxation on investment income if he were to become prime minister.

The tax on investment income—applying to capital gains on stocks and property, dividends, and interest payments on savings and Japanese government bonds—is uniformly set at 20%. This is lower than progressive tax rates on salaries that can go up to 45%, as part of an effort to encourage investment.

The flat-rate tax system reduces the overall burden for high-income earners, who typically generate more income through investments.