LDP Divided over Proposed Consumption Tax Cut

Tokyo, July 31 (Jiji Press)–Japan’s ruling Liberal Democratic Party is divided over Prime Minister Sanae Takaichi’s proposal to cut the consumption tax rate for food from 8 pct to 1 pct for two years starting in April 2027 as an anti-inflation measure. The LDP held a joint meeting of its research commissions on the tax and social security systems Friday to discuss the proposal. At the meeting, some supported the tax cut as it was included in the LDP’s campaign pledges for the February election for the House of Representatives, the lower chamber of Japan’s parliament. The party, led by Takaichi, scored a landslide victory in the poll. Meanwhile, others expressed concerns over whether financial resources can be secured and over possible difficulties raising the tax rate after two years. The joint meeting was attended by about 50 lawmakers and lasted around 90 minutes, 30 minutes longer than scheduled. “We’ve gained voter confidence in the Lower House election,” Shuichi Takatori, a member of the chamber, who is close to the prime minister, said, expressing support for the tax cut. “I want to respect the decision by the prime minister, who vowed to keep a promise.” “I support the prime minister’s decision,” said Kuniko Inoguchi, former minister for addressing the country’s sluggish birthrate. “We have to carry it out with an unwavering resolve.” Some proponents noted public support for tax cuts. In contrast, former Defense Minister Gen Nakatani claimed that “we can’t make a responsible decision” because Takaichi has not specified financial resources necessary for the tax cut. “To support people in need, a cash benefit program would be more effective than a uniform tax cut,” former LDP policy chief Tomomi Inada said, adding, “Even if people say we breached a (campaign) promise, we should do what is best for the people.” Several attendees said that supporters of the tax cut slightly outnumbered opponents. Even so, Takatori said on X, formerly Twitter, that 14 of the 18 participants who expressed opinions in favor of the tax reduction are members of a group of LDP lawmakers supporting Takaichi. “I understand the opposition, but since the prime minister has made a decision, it would be more harmful to overturn it,” a middle-ranking LDP member said. Before the joint meeting, senior members of the Research Commission on the Tax System held talks. Itsunori Onodera, head of the panel, told reporters that 60 pct opposed the consumption tax reduction. “It will be chaos whether the tax rate is returned (to a higher level) or not,” Shoji Nishida, a lawmaker of the House of Councillors, the upper parliamentary chamber, said. Takaichi plans to raise the tax rate back to 8 pct after two years. “If we make a mistake in judgment, it will be irreversible,” Nishida added. The LDP plans to hold the next joint meeting of the two commissions Monday. The prime minister hopes to make the government’s decision on the consumption tax cut plan at a cabinet meeting in early August. END [Copyright The Jiji Press, Ltd.]