LDP Virtually Approves Consumption Tax Cut on Food

Tokyo, Aug. 3 (Jiji Press)–Japan’s ruling Liberal Democratic Party on Monday virtually approved Prime Minister Sanae Takaichi’s plan to lower the consumption tax rate on food from 8 pct to 1 pct for two years from next April. The LDP’s tax system and social security system research commissions held a joint meeting and decided to leave the matter to the chair of the tax system research commission, Itsunori Onodera, after participants expressed pros and cons. “We will implement the consumption tax cut by fully overcoming the challenges that surfaced during the discussions,” Onodera told reporters after the meeting. It was the second joint meeting of the LDP panels, following the previous meeting on Friday. According to a senior member of the tax panel, 65 participants of the latest meeting expressed support for the tax cut plan, while nine opposed it. At the previous meeting, supporters of the tax cut plan only slightly outnumbered opponents. After attending Monday’s meeting, former Prime Minister Shigeru Ishiba criticized the tax cut plan for lacking fiscal resources. “The consumption tax rate in Japan is significantly low (compared with other countries). … Its fiscal situation is the worst in the world,” Ishiba argued. “This should be fully discussed.” Last week, Takaichi officially announced the tax cut plan, which would reduce the food tax rate to virtually zero by providing income-linked benefits equivalent to tax revenue from a 1 pct tax rate. The LDP leadership plans to complete related intraparty procedures after securing approval at a meeting of the party’s general council on Wednesday. As the LDP’s coalition partner, the Japan Innovation Party, has already decided to support the tax cut plan, the government aims to adopt the plan at a cabinet meeting on Wednesday. END [Copyright The Jiji Press, Ltd.]