Japan Panel Discusses Issues on Zero Consumption Tax for Food

Tokyo, April 28 (Jiji Press)–A Japanese suprapartisan national council Tuesday discussed points of contention regarding a proposal to temporarily exempt food items from the consumption tax. Working-level members agreed that the panel will study concrete measures from May to resolve issues raised during hearings with related industries, including the need to renovate cash register systems, which will take about a year. Itsunori Onodera, chairman of the ruling Liberal Democratic Party’s Research Commission on the Tax System, who heads the council told reporters after the day’s meeting that the panel will deepen discussions on the consumption tax cut in three categories–the impact on the economy, system upgrades, and the impact on agricultural, forestry and fishery businesses. “I hope to gather opinions from each political party so that we can share a certain direction,” he added. Summaries of the outcomes of the hearings conducted since mid-March were presented at the day’s working-level meeting. Participants pointed to challenges such as potential rises in interest rates in case alternative revenue worth about 5 trillion yen per year is not secured, the possibility of food price falls being limited even if the consumption tax is reduced to zero, and increases in system upgrade and administrative costs. The council is considering cutting the consumption tax rate to zero for food for two years as a stopgap measure until the introduction of a refundable tax credit program, aiming to draw up an interim report by this summer. Its next meeting, slated for mid-May, is expected to focus on issues related to the refundable tax credit scheme. END [Copyright The Jiji Press, Ltd.]