Japan PM Takaichi Seen to Seek 1 Pct Food Tax Deal

Tokyo, July 28 (Jiji Press)–Japanese Prime Minister Sanae Takaichi is considering adopting a proposal to reduce the consumption tax rate on food to 1 pct for two years from April next year as a provisional measure, informed sources said Tuesday. The tax cut would be implemented until the introduction of a new benefit program, according to several government and ruling party sources. Takaichi, who is also president of the ruling Liberal Democratic Party, is set to instruct LDP executives as early as Thursday to proceed with party procedures for the proposed tax cut on food. Takaichi has expressed a longstanding desire to reduce the consumption tax rate to zero. While the National Council on Social Security had discussed the matter, a working group under the suprapartisan council decided Monday to give up on reaching a consensus, reflecting a gap between the ruling camp and opposition parties, which had pushed for a cash handout program. An interim report featuring both the 1 pct consumption tax plan and the cash handout plan is slated to be submitted to the council at a meeting Wednesday. Speaking at a meeting of LDP executives Tuesday, Takaichi said, “I’ll make a decision when I have to.” She later held talks with LDP Vice President Taro Aso and Secretary-General Shunichi Suzuki, who both once served as the country’s finance minister. She is believed to have asked the two for their understanding of the proposed tax cut. Suzuki told reporters after the meeting that the people consider the envisioned tax cut one of the LDP’s campaign pledges in the House of Representatives election in February this year. “There is a view that we must meet (such expectations),” he said. Many LDP members, however, have reservations about the proposed tax cut. At an LDP meeting discussing the interim report Tuesday, some participants voiced criticism, with former Defense Minister Gen Nakatani saying, “I cannot accept the report because it does not clearly mention where the money (to fund the measures) would come from.” END [Copyright The Jiji Press, Ltd.]