Takaichi’s Tax Cut Plan Draws Industry Opposition

Tokyo, April 8 (Jiji Press)–Industry representatives have raised objections to Japanese Prime Minister Sanae Takaichi’s plan to reduce the consumption tax rate on food to zero for two years. At a working-level meeting of the National Council on Social Security on Wednesday, cash register system firm officials complained that implementing system updates to adjust for the tax cut would take about a year, and that the industry lacks engineers familiar with existing systems, according to the meeting’s chair, Itsunori Onodera, chairman of the ruling Liberal Democratic Party’s Tax System Research Commission. Meanwhile, a financial market representative expressed concerns about fiscal deterioration, given that the tax cut would dent Japan’s annual tax revenue by about 5 trillion yen. The representative warned of a spike in bond yields without a concrete funding plan for the tax cut. At previous working-level meetings, a retail industry official said that system updates could cost several million yen per company and nearly 100 million yen for large companies. A business group official said that the tax cut may not lower prices as much as expected. The Takaichi administration is positioning the two-year tax cut as a stopgap measure until the introduction of a refundable tax credit program. However, another business group official argued that a refundable tax credit program could provide swifter and more effective relief to low- to middle-income earners than the tax cut would. After Wednesday’s meeting, Onodera told reporters, ” We’ll consider how to overcome challenges.” END [Copyright The Jiji Press, Ltd.]