Takaichi Denies Issuing Deficit Bonds for Consumption Tax Cut

Tokyo, Jan. 24 (Jiji Press)–Japanese Prime Minister Sanae Takaichi on Saturday denied the possibility of newly issuing deficit-covering government bonds to realize a zero consumption tax rate on food items. “If it (the tax cut) is limited to two years, we can certainly manage without issuing special deficit-financing bonds,” Takaichi, also president of the ruling Liberal Democratic Party, said in a debate session with other party leaders, which was organized by an internet video site ahead of the Feb. 8 House of Representatives election. She cited reviewing subsidies and special tax breaks, along with securing nontax revenues, as alternative funding sources. The LDP included in its policy pledges for the upcoming election for the all-important lower chamber of Japan’s parliament a commitment to accelerate discussions on reducing the consumption tax rate to zero for food items for two years. Also during the debate, the prime minister said she definitely wants to see enacted legislation criminalizing the damaging of the Japanese national flag. The LDP and the Japan Innovation Party included in their coalition agreement the enactment of this legislation during this year’s ordinary parliamentary session. The funding sources for the consumption tax cut pledged by both ruling and opposition parties became a key point of contention in the debate. Yoshihiko Noda, co-chief of the newly formed Centrist Reform Alliance, argued that a permanent zero tax rate on food can be achieved by utilizing existing funds and establishing a government-affiliated fund for management, stating, “We will not issue deficit bonds.” Tomoko Tamura, head of the Japanese Communist Party, said the consumption tax rate can be cut by reviewing tax cuts and preferential treatment for large companies and the wealthy. Meanwhile, Akiko Oishi, co-leader of Reiwa Shinsengumi, argued that the government should primarily respond by issuing deficit bonds. Sanseito leader Sohei Kamiya also called for tax cuts through bond issuance and raising corporate taxes. JIP co-leader Fumitake Fujita said, “Simply handing out money will backfire on the yen and long-term interest rates.” He emphasized the need to review the social security system. Yuichiro Tamaki, leader of the Democratic Party for the People, said, “There’s no need to do it (consumption tax reduction) once the economy improves,” indicating his intention to carefully watch wage increase trends and other factors. END [Copyright The Jiji Press, Ltd.]