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5G networks

Japan to promote 5G with new tax incentives

Ruling party eyes three-year tax plan to accelerate network development

TOKYO -- Japan should introduce tax incentives for companies that invest in infrastructure for the 5G next-generation wireless technology network, the ruling Liberal Democratic Party's tax system research commission said on Monday.

In hopes of facilitating development of the vital backbone for the network, the LDP aims to include the proposal in its tax revision outline for 2020.

The incentives would for a three-year period benefit licensed mobile phone companies and others who build wireless communication networks for areas such as those occupied by factories. Companies would get a 9% tax credit or 30% bonus depreciation for their 5G investments, Akira Amari, the commission's chairperson, told reporters after a meeting of the commission's top officials.

The government will devise new tax rules based on the commission's proposal and will decide on the specific requirements for companies that wish to apply. The incentives are likely to be limited to three years as they are aimed at accelerating the early stages of 5G infrastructure development.

Companies would be required to submit their 5G network plans and get approvals from appropriate ministries. The commission will also call for those companies to hasten their efforts.

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