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Exclusive: Japan eyes tax breaks to steer idle cash into M&A deals

Companies hoarding profits miss out on innovation, ruling party tax chief says

A Tokyo expressway: The tax policy chief of Japan's ruling party wants to move cash-fueled acquisitions into the fast lane.   © Reuters

TOKYO -- Japan's ruling party will propose tax breaks to encourage businesses to channel their record stashes of cash into mergers and acquisitions that fuel new thinking and businesses.

"Innovation doesn't happen at companies where retained earnings keep piling up," Akira Amari, the Liberal Democratic Party's new tax policy chief, told Nikkei in an interview.

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