Shinzo Abe’s administration will exempt from taxation gifts of money given by the elderly to their grandchildren, in order to finance the youngster’s education, according to Kyodo news agency. The decision is part of the new government’s economic stimulus package, meant to regenerate Japan’s economy.
Japan is struggling with an aging population and experts say that tapping the sums of money held by the elderly could be the main support for stimulating economic growth. The older category of Japan’s population is said to own about 60 percent of financial instruments held by individuals.
The new stimulus package will be presented on Friday and it will also include other tax incentives to help the local economy get back on track, such as lower taxes for companies increasing payrolls and business investment.
The government has discussed exempting capital transfer tax for the elderly who are donating funds to their grandchildren, in order to be used for tuition fees and other costs. The tax exemption will probably be used for sums of up to Y15 million (about $171,500), the sources said.