Eligible Recipients Key in Japan Refundable Tax Credit Talks

Tokyo, May 18 (Jiji Press)–The scope of benefit recipients under a proposed refundable tax credit program is a key issue in discussions at a Japanese nonpartisan council due to differences in eligibility criteria sought by each party. It is uncertain whether an interim report, expected to be released before this summer, will provide specific details as the program involves many other issues that need to be sorted out, including the amount of aid. The National Council on Social Security is currently advancing full-scale talks on the design of the refundable tax credit program. So far, working-level officials from each party participating in the council have confirmed that the aim of the program, which combines tax breaks and cash benefits in accordance with taxpayers’ income, is to reduce the burden on low- and middle-income workers. At a meeting Wednesday, participants largely agreed that support under the program should, in principle, be provided on an individual basis rather than on a household basis. “It’s important to create a solid system and at the same time to have a sense of speed,” Itsunori Onodera, the ruling Liberal Democratic Party’s tax chief, who chairs the working-level meetings, told reporters after Wednesday’s talks, indicating his intention to accelerate discussions toward reaching a consensus. However, talks on the detailed design of the program have yet to begin. Regarding the scope of eligible recipients, the Japan Innovation Party, the LDP’s coalition partner, advocates intensive support for families with children. The opposition Centrist Reform Alliance calls on the government to minimize the number of low-income individuals who do not receive benefits. The LDP maintains that the program must be designed as precisely as possible to gain public acceptance. Since it is assumed that building a system for tax deductions will take time, there is a plan to initially introduce the program in the form of benefits without tax deductions. The Democratic Party for the People, another opposition party, calls for early distribution using not only cash benefits but also electronic money. While each party plans to proceed with discussions while hearing opinions from experts, there are further issues, such as administrative burdens on local governments, that need to be addressed. “It may be impossible to compile (an interim report) before summer,” DPFP’s tax affairs chief Motohisa Furukawa said. END [Copyright The Jiji Press, Ltd.]