Japanese Prime Minister Shinzo Abe is considering a corporate tax cut as a way to offset the potential economic drag of a planned two-stage hike in the sales tax, the Nikkei economic daily reported on Tuesday, citing government sources.
(Read more: Hiking Japan's sales tax: why it's now or never)
Abe has called for a study on lowering corporate tax, which at 38.01 percent is one of the highest in the industrial world, as a way of easing the burden on Japanese companies and attracting foreign investment, the Nikkei reported.
Lowering corporate tax could spark capital expenditure, an area that has lagged behind Japan's economic recovery.