Not sure I understood this, but it seems completely wrong.
"Japanese tax policy creates concrete incentive for greater equity allocation for retail investors
Effective this year, PM Kishida doubled the amount Japanese households can invest in equities, free of capital gains tax and dividend tax.
The numbers are significant: this new expanded NISA raises the tax-exempt period from 5-years to 20-years, and the total investment limit from Y6 million to Y8 million. Given that median household net financial assets stand at around Y18 million, the authorities now tax incentivize households to hold around 40% in “risk assets”."
Are you referring to the New NISA, starting next year? If so, the tax-exempt period (which is currently 5 or 20 years depending on NISA type) becomes unlimited, the annual contribution limit rises to 3.6m, and the lifetime contribution limit rises to 18m yen. This is a great development for individual investors in Japan.
Thank you, Retire Japan, for alerting me to my error. You are correct, I was referring to the current NISA tax exempt investment incentives; and the New NISA scheme, effective from 2024, will be even more generous. So from next year, individual investors in Japan will be able to have a total of Y18 million tax exempt - which is equivalent to basically 100% of current average per household savings - a super strong incentive to shift into risk assets. I shall correct and add a table in the text to clarify. Thank you for your help. Many cheers ;-j
As an alternative to implementing more tax increases, how should the government pay for all of the new, costly initiatives (e.g., more defense spending, etc.)? Somehow become more efficient by reducing the cost of existing bureaucracy?
Not sure I understood this, but it seems completely wrong.
"Japanese tax policy creates concrete incentive for greater equity allocation for retail investors
Effective this year, PM Kishida doubled the amount Japanese households can invest in equities, free of capital gains tax and dividend tax.
The numbers are significant: this new expanded NISA raises the tax-exempt period from 5-years to 20-years, and the total investment limit from Y6 million to Y8 million. Given that median household net financial assets stand at around Y18 million, the authorities now tax incentivize households to hold around 40% in “risk assets”."
Are you referring to the New NISA, starting next year? If so, the tax-exempt period (which is currently 5 or 20 years depending on NISA type) becomes unlimited, the annual contribution limit rises to 3.6m, and the lifetime contribution limit rises to 18m yen. This is a great development for individual investors in Japan.
Thank you, Retire Japan, for alerting me to my error. You are correct, I was referring to the current NISA tax exempt investment incentives; and the New NISA scheme, effective from 2024, will be even more generous. So from next year, individual investors in Japan will be able to have a total of Y18 million tax exempt - which is equivalent to basically 100% of current average per household savings - a super strong incentive to shift into risk assets. I shall correct and add a table in the text to clarify. Thank you for your help. Many cheers ;-j
My pleasure! Really enjoy your work.
Always a pleasure to read your work, thank you for the detailed analysis. Cheers
As an alternative to implementing more tax increases, how should the government pay for all of the new, costly initiatives (e.g., more defense spending, etc.)? Somehow become more efficient by reducing the cost of existing bureaucracy?