Tokyo, Oct. 20 (Jiji Press)–Deliberations began in the House of Representatives, the lower chamber of the Diet, Japan’s parliament, on Tuesday on legislation to cut the consumption tax on food and introduce an income-linked benefit program. This set of measures is “the best option in terms of the sufficiency and promptness of support,” Prime Minister Sanae Takaichi said during a plenary meeting of the Lower House on the day. However, Takaichi did not elaborate on how her government will secure the roughly 5 trillion yen needed to cover the annual revenue loss from the measures or the design of the income-linked benefit system. “We will consider (revenue sources) while taking into account deliberations in the Diet,” she said. Finance Minister Satsuki Katayama reiterated that the government will secure revenue sources “by reviewing expenditures and revenues, rather than relying on deficit-covering bonds, to maintain market confidence.” This would be the first consumption tax reduction since the tax was introduced in 1989. The government and the Liberal Democratic Party-Japan Innovation Party ruling coalition have positioned the legislation as the most important matter of the current Diet session, aiming to secure approval by the Lower House by early November. Although the opposition Conservative Party of Japan has expressed support for the legislation, there is still no clear prospect of the legislation’s passage in the Senate, the upper chamber, where the ruling coalition lacks a majority. Attention is focused on whether the ruling camp can secure enough support for the legislation in the Upper House to clear the majority threshold by compromising with opposition parties. At a press conference on Tuesday, LDP Executive Acting Secretary-General Koichi Hagiuda said, “We would like to sincerely consider the views of opposition parties and seek agreement where possible.” Yuichiro Tamaki, leader of the opposition Democratic Party for the People, told a separate press conference, “We are not opposed to the bills from the outset,” indicating his intention to call for revisions to the legislation. The legislation would lower the 8 pct consumption tax rate for food items to 1 pct for two years starting in April 2027 and introduce an income-linked benefit system for low- and middle-income earners. Before fully implementing the benefit system in fiscal 2029, the government plans to provide benefits corresponding to a 1 pct consumption tax for two years. Meanwhile, the DPFP submitted a counterproposal to the government legislation to the Lower House the same day. The counterproposal aims to reduce annual household burdens by around 50,000 yen through income and resident tax cuts and benefit payments. Among other opposition parties, Komeito has called for benefits of 80,000 yen per person, while the Constitutional Democratic Party of Japan is also advocating benefit payments. END [Copyright The Jiji Press, Ltd.]
