Japan offers 30% tax break to big companies that hike wages by 4%

Its economy contracts 3.6% sequentially in third quarter

Japan will deny some tax breaks to big companies that do not hike wages while boosting deductions for those that do, as it moves to boost domestic salaries, a final draft of the ruling party’s annual tax reform plan showed on Wednesday.

Large companies that raise wages by 4 per cent from the previous year will get deductions of up to 30 per cent of taxable income, up from the maximum of 20 per cent now, according to the plan for the next fiscal year’s tax reform obtained by Reuters. Small firms that raise wages by 2.5 per cent will qualify