TOKYO, Sept 30 (Reuters) - The Japanese government will avoid cutting the income tax in an economic stimulus package, while including tax breaks for companies, according to a draft of the package seen by Reuters on Monday.
Prime Minister Shinzo Abe ordered his government to craft the package to cushion the economy from a planned increase in the nation's sales tax. Government sources have said Abe on Tuesday will go ahead with the plan to raise the tax in April to 8 percent from 5 percent.
Most of the elements of the stimulus package, expected to total about 5 trillion yen ($50.89 billion), have already been hammered out, but income-tax cuts and measures for individuals compromise the final area of negotiation.
The draft package, as expected, call for bringing forward by one year, to next April, the end of a special corporate tax earmarked for reconstruction from the 2011 earthquake and tsunami.
But the draft says that bringing forward the end of a similar extra tax on incomes "would be difficult."