LDP, DPFP Agree to Raise Taxable Income Threshold to 1.78 M. Yen

Tokyo, Dec. 18 (Jiji Press)–Japan’s ruling Liberal Democratic Party and the opposition Democratic Party for the People agreed at a meeting of their tax panel chairs on Thursday to raise the taxable income threshold from the current 1.6 million yen to 1.78 million yen. The threshold hike will be included in the ruling bloc’s fiscal 2026 tax system revision outline, to be adopted on Friday. In December last year, the then LDP-Komeito coalition and the DPFP agreed to aim to raise the taxable income threshold to 1.78 million yen. While the LDP has considered lifting the threshold to 1.78 million yen only for low-income earners, the DPFP has argued that the middle class should also benefit from a lower tax burden. The LDP and the DPFP also agreed to abolish the environmental performance-linked tax on automobile purchases, as demanded by the DPFP. The government and the ruling bloc had planned to suspend the tax for two years from fiscal 2026. END [Copyright The Jiji Press, Ltd.]