The economic stimulus package

The Japanese government will soon be offering a $51 billion economic stimulus package to businesses and taxpayers. Here’s some information on what normal people can expect to get out of it:

As part of the deal, 2 trillion yen in all will be handed out to Japanese households in one-off payments by next March. This means a family of four in Japan will receive about 60,000 yen in cash – a move designed to boost domestic spending.

Consumers can also look forward to receiving bigger tax deductions on their home mortgages and an extension of current tax reductions on capital gains and dividends.

For the corporate sector, there are also increased loan guarantees for small and medium-sized firms that comprise the biggest portion of the package in terms of value.

This is aimed at easing the credit squeeze small companies are expected to face as banks continue to cut back on lending.

Mr Aso’s package even takes care of the little details. To boost usage of expressways outside metropolitan areas, tolls are to be reduced to a maximum of 1,000 yen for car owners on holidays.

There will be easily visible drawback, however. Aso has said that the government is considering an sales tax increase three years from now. Be prepared for a future where everything at 100-yen store costs more than 105 yen!

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