TOKYO , Jan. 21 -- ( Kyodo ) _ Japan's Finance Minister Taro Aso on Tuesday gave short shrift to Prime Minister Shinzo Abe's desire to discuss the positive effects of a corporate tax cut, saying it would be difficult to secure financial resources to cover a decline in tax revenues. Aso's remarks came after Abe called on his Cabinet members during a meeting of a government panel Monday to study the possibility of whether a corporate tax cut would stimulate the economy, which would eventually help tax revenues grow. "How can we find financial resources to make up for shrinking tax revenues?" Aso said at a press conference, adding that if the government cuts the corporate tax rate by 10 percent, this would reduce overall tax revenues by about 5 trillion yen annually. Given that the country's fiscal health is the worst among major industrialized economies, Aso added that "we have to pay attention to the significance of fiscal consolidation." In the meeting on Monday, private-sector members also proposed the government cut the nation's effective corporate tax rate to around 25 percent from about 35 percent to invigorate foreign investment in Japan . The proposal, presented in the meeting of the Council on Economic and Fiscal Policy , came as business leaders and some experts have argued that foreign companies remain reluctant to operate in Japan , and that economic growth has been choked, because the corporate tax burden is heavy by international standards. Aso said at the news conference that he told the private-sector members that the corporate tax issue should be discussed "within a wide framework including industrial policy." Japan's effective corporate tax rate, consisting of national and local taxes, exceeds the levels of around 25 percent in China and South Korea , according to data released by the Finance Ministry .
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