In Japan, the term special tax measures
generally refers to tax incentives.
These can also be called tax preferences, tax benefits, and tax expenditures. Although the Ministry of Finance (MOF) constructs the list of special tax measures,
their scope seems to be narrower than that of tax expenditures in the United
States in terms of tax incentive policy. (See Pechman and
Kaizuka, 1976, p. 352
For a more comprehensive discussion of tax incentives in postwar Japan,
see Ishi, 1993, Ch. 3
These percentages fell drastically to between 1 percent and 2 percent in the 1970s. (See Ishi, 1989, Table 3.2, p. 43). Other revenue losses are those for the
promotion of individual saving and housing, the promotion of business saving
and investment, and the promotion of environmental quality.
Tax incentives for export promotion are often applied through indirect, not
direct, taxes, particularly in developing countries. For a general discussion, see F. Sanchez-Ugarte, 1987, pp. 267-269
The increased rate for deduction was 1.5 percent for trading firms and 7.5
percent for exports of plants.
A single manufacturing firm, however, showed 47.6, 51.0, 74.2, and 0 percent in four successive half-year accounting periods.
The Tax Advisory Commission, which is one of the most important organizations in assisting the formulation of tax policy and reform in Japan, was established by the prime minister in 1953. (For a comprehensive discussion of the Tax
Advisory Commission, see Ishi, 1993, Ch. 1
). The main function of the commission was to assess Japan's entire system, to formulate annual tax changes, and to
develop long-term tax policy.
Even among contracting parties that accepted Plan A in 1960, a number of
countries continued to employ a variety of export-promoting tax measures. For
example, there were the Western Hemisphere Trade Corporation, China Trade
Corporation, Export Trade Corporation in the United States, the Overseas Trade
Corporation or tax-sparing system in the United Kingdom, and special tax measures (e.g., accelerated depreciation, tax-free reserves) in West Germany, France, Canada, and Italy, all of which were equivalent to those in Japan.
The additional deduction was revived in 1962 with the minor amendment
that only the net income criterion could be used to calculate it.
Ackley, G., and
H. Ishi, 1976, "Fiscal, Monetary, and Related Policies," in
H. T. Patrick
H. Rosovsky, eds., Asia's New Giant ( Washington, DC, The Brookings Institution).
Bank of Japan, 1970, Economic Statistics Annual (Tokyo).
Economic Planning Agency, 1968, Annual Report of Observing Economic Fluctuations (in Japanese) (Tokyo).
General Agreement of Tariffs and Trade, 1958, Basic Instruments and Selected Documents, vol. 3., Text of the General Agreement (Geneva, November).
Ishi, H., 1993, The Japanese Tax System, 2nd ed. ( Oxford, Oxford University