Japanese voters are casting their ballots in national elections in the first big test for Prime Minister Fumio Kishida.
Up for grabs are 465 seats in the lower house, the more powerful of the two-chamber Japanese Diet, or parliament.
The results will determine if Mr Kishida, 64, has a large enough mandate to tackle a coronavirus-hit economy, an ageing and dwindling population and security challenges from China and North Korea.
His governing Liberal Democratic Party is expected to lose some seats from pre-election levels but maintain a comfortable majority together with its junior coalition partner Komeito.
Mr Kishida was elected prime minister on October 4 after winning the leadership race in his ruling party, as its conservative leaders saw him as a safe status-quo successor to Yoshihide Suga and his influential predecessor Shinzo Abe.
His immediate task has been to rally support for a party weakened by Mr Suga’s perceived high-handed approach to pandemic measures and his insistence on holding the Tokyo Summer Olympics despite widespread opposition.
He dissolved the lower house only 10 days after taking office, called for the election and declared that he wanted a mandate from voters for his government.
The short 17-day campaign period that followed the LDP leadership race, which had dominated media coverage, unfairly gave Mr Kishida’s party an advantage over the opposition, some experts say.
His long-term ambitions will depend on how well he does in the election.
Mr Kishida repeatedly stressed his determination to listen to the people and to address criticism that the nine-year Abe-Suga leadership had resulted in corruption, tamed bureaucrats and muzzled opposing opinions.
The campaign has largely centred on measures to combat Covid-19 and revitalise the economy.
While Mr Kishida’s ruling party stressed the importance of having a stronger military amid worries over China’s growing influence and North Korea’s missile and nuclear threat, opposition parties focused on diversity issues and pushed for gender equality.
Opposition leaders complained that recent LDP governments widened the gap between the rich and the poor, failed to support the economy during the pandemic and stalled gender equality and diversity initiatives.
Most results are expected early on Monday.
The LDP opposes legislation guaranteeing equality for sexual minorities and allowing separate surnames for married couples.
Of the 1,051 candidates, only 17 per cent are women, despite a 2018 law – which has no penalty – promoting gender equality in elections.
Women account for about 10 per cent of parliament, a situation gender rights experts call “democracy without women”.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Match info
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Kante (34'), Jorginho (45' pen), Pedro (80')
