Takaichi to Vow to Submit Consumption Tax Cut Bills Early

Tokyo, Feb. 17 (Jiji Press)–Japanese Prime Minister Sanae Takaichi will pledge in her upcoming policy speech to accelerate efforts to submit bills to revise tax-related legislation, aiming to cut consumption tax on food to zero for two years, it was learned Tuesday. In the speech she will deliver to outline the government’s overall direction on Friday at a special session of the Diet, Japan’s parliament, Takaichi will announce plans to compile an interim report on the proposed tax cut before summer and “expedite the submission of bills related to tax reform,” according to a draft of the speech. The prime minister will also vow to “press growth switches” and introduce a mechanism to manage growth sectors in multiyear and separate budgets. The special Diet session will be convened on Wednesday for a 150-day run until July 17. A national council, which includes ruling and opposition party members as well as experts, will accelerate deliberations on the schedule and financial resources for the consumption tax cut. Japan’s consumption tax currently stands at 10 pct, excluding food and some other items for which the tax rate is 8 pct. Under the banner of what her administration touts as its “responsible and proactive” fiscal policy, Takaichi will declare in the speech that the government “should not hesitate to take necessary fiscal measures” for promoting domestic investment, according to the draft. The prime minister will propose a road map from March for public and private sector investments in growth sectors, citing the utilization of multiyear budgets and long-term funds as measures to promote such investments. The speech draft includes plans to promote a review of the discretionary working system as Takaichi is eager to ease labor regulations. On the diplomatic front, she will emphasize the need to “evolve strategically” the free and open Indo-Pacific initiative, marking the 10th anniversary of its proposal by the late former Prime Minister Shinzo Abe. She will promise to “strengthen and enrich the Indo-Pacific” by enhancing the supply chain of important goods and expanding the scope of the official security assistance, which provides free defense equipment to like-minded countries. Takaichi will also aim to expand the number of countries that are parties to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Regarding economic security, which the prime minister attaches importance to, she will pledge to rebuild supply chains so that they are not dependent on specific countries, with China in mind, and strengthen cooperation with like-minded countries to reduce dependency. She will call for the establishment of a Japanese version of the Committee on Foreign Investment in the United States to review foreign capital investments. With regard to policies on foreign nationals, she will address “appropriate acceptance of foreign human resources” as labor force while reviewing regulations on land acquisition. On the secondary capital concept promoted by the Japan Innovation Party, the ruling Liberal Democratic Party’s coalition partner, she will state that the government will expedite consideration of the responsibilities and functions of the capital and the secondary capital. END [Copyright The Jiji Press, Ltd.]