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ECONOMY > Economic Policy

3 million households to benefit from proposed spousal tax deduction review

  • December 9, 2016
  • , Yomiuri , p. 2
  • JMH Translation

The outline of FY17 tax reforms endorsed by the Liberal Democratic Party and Komeito on Dec. 8 includes a review of the spousal tax deduction that will reduce income tax for households with housewives or wives working part-time.

 

This review will benefit some 3 million households, reducing tax revenues by 150 billion yen. On the other hand, around 1 million households will be paying higher taxes, bringing in tax revenues of around 150 billion yen, so the people’s tax burden will remain unchanged.

 

In concrete terms, households where the wife’s income from her part-time job is between 1.03-2.01 million yen will enjoy a tax cut, although this will also depend on the husband’s income. The Finance Ministry estimates that households where the wife’s income is from 1.41-1.5 million yen and the husband’s income is 5 million yen will enjoy a combined tax cut of 52,000 yen each year in income and residential taxes.

 

On the other hand, households where the wife’s income is under 1.03 million yen and the husband’s income exceeds the newly set ceiling of 11.2 million yen will have to pay more taxes. The Finance Ministry estimates that households where the husband’s income is 15 million yen and the wife stays home will be paying an additional 158,000 yen in taxes annually. (Abridged)

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