The government and ruling parties will establish a new tax system in the next fiscal year's tax reform that will exempt up to 2 billion yen from the profits earned by individual investors from the sale of stocks if they are reinvested in startup companies.
The aim is to encourage individual investors to support start-up companies.
Under the new tax system, if an individual investor reinvests the profit from the sale of shares in a startup company within the same year, up to 2 billion yen of the profit on the sale will be exempted from income tax.
By increasing the merits of individual investors investing, the aim is to make it easier for start-up companies to collect the funds necessary for growth.
This measure will limit investment targets to companies that are less than five years old, have not made sufficient profits, and are in need of financial support.
On the other hand, under the new tax system, even those who start a business with their own funds obtained by selling their stocks will not be subject to income tax, up to 2 billion yen.
Investment in domestic start-up companies is currently around 800 billion yen per year, but the Kishida administration has set a goal of raising it to 10 trillion yen in five years.