Sep.16.2003

Japanese Bankers Association

JBA's Request for Fiscal 2004 Tax Reform Finalized

The Board of Directors Meeting held on September 16 finalized the request for fiscal 2004 tax reform, and submitted a paper to concerned parties including the Financial Services Agency, Ministry of Finance and Liberal Democratic Party.JBA compiled essential items to be included in JBA's request for fiscal 2004 tax reform in July, and this final version is based on the items then listed and subsequent coordination with relevant bodies.Of the seventeen requests, priority is placed on two requests: "Expansion of carry-forward deduction/carry-back refund system and review of tax-exempt write-off rules for bad loans" and "Further expansion of tax measures to facilitate stock investment."In regard to the first request, the item list in July did not specify the number of years for expanding the carry-forward deduction/carry-back refund system. Following consideration of steps taken by ministries and last year's JBA request, the final version requests to extend the current carry-forward period of five years to at least ten years, restore the carry-back refund system and extend the current carry-back period of one year to at least two years for all industries. Moreover, the JBA paper requests this be made it to sixteen years for financial institutions in case the supervisory rule for banks' differed tax assets is changed. JBA asks these two items and a review of tax-exempt rules for bad loans to be realized concurrently as one set of tax measures.As for the second request, the specific contents match the July paper. However, the final paper cites the Personal Equity Plan of the U.K. in an explanatory note, as a good example for expanding tax measures to facilitate stock investment by eliminating taxes on profits from stock sales.