(The first paragraph should have read “Japan’s Senate began deliberations Wednesday…” instead of as sent.) Japan Upper House Begins Debate on Food Tax Cut Bill Tokyo, Nov. 11 (Jiji Press)–Japan’s Senate began deliberations Wednesday on a bill that would temporarily cut the consumption tax rate on food and fully introduce a benefit program for middle- and low-income earners after the temporary tax cut expires. At a plenary meeting of the Upper House on the day, Prime Minister Sanae Takaichi emphasized that most of those eligible for the benefit program will receive more support than the tax cut. However, Takaichi did not clarify how to secure the necessary funding of about 5 trillion yen per year for the tax cut or provide details about the benefit program. Due to its lack of a majority in the Senate, the ruling Liberal Democratic Party-Japan Innovation Party coalition is seeking support from other parties including the Democratic Party for the People and Komeito to pass the tax cut bill before the Dec. 12 end of the current parliamentary session. On Wednesday, the LDP and the main opposition Constitutional Democratic Party of Japan agreed to start deliberations on the bill in a Senate special committee on Friday. The bill calls for reducing the consumption tax rate on food to 1 pct for two years starting in April 2027 while offering income-linked benefits equivalent to a tax rate of 1 pct. The benefit program will be fully introduced in fiscal 2029. During Wednesday’s plenary meeting, Takaichi reiterated that the government will secure fiscal resources for the tax cut without relying on deficit-covering bonds. Shinichi Shiba of the CDP proposed providing cash benefits within the current fiscal year to help people cope with inflation. However, the prime minister rejected the proposal, saying that distributing benefits would be time-consuming and difficult to implement nationwide within the current fiscal year. Hitoshi Takezume of the DPFP urged the government to adopt the party’s proposal for resident and income tax cuts. However, Takaichi maintained her cautious stance, citing strong concerns among local government leaders. END [Copyright The Jiji Press, Ltd.]
