Japan business groups seek one-year stock tax freeze

Japanese business lobbies led by the Japan Business Federation will propose to the government a one-year freeze on stock capital gain and dividend taxations in an attempt to shore up the sagging Tokyo market.

A spokesman for the federation said yesterday that the steps are aimed at drawing funds into the market, whose benchmark Nikkei average (N225) ended last week at a 20-year closing low.

The groups, which also include the Japan Association of Corporate Executives and the Japan Chamber of Commerce and Industry, will propose tax exemptions on dividends and capital gains incurred by individual investors during the financial year ending in March 2004, the spokesman said.

They will also propose removing stockholdings from assets subject to inheritance tax, he said.

Three straight years of declining stock prices in Tokyo have made Japan's risk-averse investors increasingly edgy about putting money into equities.