Japanese Bankers Association

Urgent Tax Reform Request on Profits from Stock Sales

On October 17, JBA, jointly with the Japan Securities Dealers Association, the Trust Companies Association of Japan, the Life Insurance Association of Japan, and the Marine & Fire Insurance Association of Japan, drafted an urgent request on the securities-related taxation as follows and submitted it to the government and coalition parties.

Urgent Tax Reform Request on Profits from Stock Sales
In order to put an end to the deflation and bring an economic recovery on the right track, it will be essential to build direct financial markets that can be the backbone of the future financial system of Japan. Especially, in light of the recent flagging conditions, the revitalization of stock markets must be addressed urgently.

The important thing for vitalizing the stock markets and ensuring their sound developments is to facilitate the participation of broad spectrum of investors, notably individual investors, in the markets. A tax policy for creating an incentive for investments is urgently needed as part of laying the groundwork for it.

The tax policy, which constitutes a part of the economic or fiscal policy of the government, must serve for the stable economic growth the national economy, and should be flexibly reviewed in accordance with the socioeconomic conditions of the country. Currently the stock markets seem to be confronting with perilous situation. We think that now is the time for the government to send the message to the nation that it thinks highly of the markets, by implementing drastic tax measures.

Specifically, we would like to request the government to implement, for the time being starting January 2003, broad tax exemption measures (the wavering of declaration) on the profits from stock sales. It will be highly appreciated if sincere attention would be paid to our request.