LDP Begins Discussions on Consumption Tax Cut Plan

Tokyo, Aug. 25 (Jiji Press)–The tax panel of Japan’s ruling Liberal Democratic Party held an informal executive meeting on Tuesday to begin discussions on details of a planned two-year cut in the consumption tax rate on food starting in April. On Aug. 5, the government adopted a plan to lower the consumption tax rate on food from 8 pct to 1 pct. Middle- and low-income earners will receive benefits equivalent to the remaining 1 pct. The LDP’s Research Commission on the Tax System is considering a temporary exemption from the requirement to display tax-inclusive prices, a relief that would apply to businesses unable to replace their price tags in time for the tax cut. The commission is also considering having the current 8 pct tax rate applied to mail-order sales and other transactions concluded before the tax rate change. The panel will consult with its counterpart from the Japan Innovation Party, the LDP’s coalition partner, to compile a tax system reform package by mid-September. The government plans to submit a related bill to parliament this autumn. The government does not specify how the revenue loss caused by the tax cut, estimated at about 10 trillion yen over the two-year period, will be offset. END [Copyright The Jiji Press, Ltd.]