- Japan’s ruling coalition is debating a Consumption Tax cut amid rising living costs and U.S. tariffs.
- The junior coalition partner, Komeito, and opposition parties are pushing for a temporary tax cut, especially on food items.
- The upcoming election on 20 July 2025 has made the tax cut a key issue.
- Opposition leader Tomoko Tamura proposes lowering the tax rate to 5% as an emergency measure.
- Japan’s current Consumption Tax rate is 10%, with an 8% reduced rate for food.
- Internal tensions exist within the ruling Liberal Democratic Party and Komeito over the tax cut.
- Some lawmakers support direct tax relief, while others worry about fiscal sustainability.
- Komeito leader Tetsuo Saito advocates for a temporary reduction in the sales tax on food.
- Saito also suggests cash payouts to households to provide immediate relief.
- LDP Secretary-General Hiroshi Moriyama and others resist tax cuts due to social security funding needs.
- Some LDP lawmakers support the tax cut to avoid electoral backlash.
- Prime Minister Shigeru Ishiba’s stance on the tax cut is inconsistent.
- Economists are divided, suggesting alternative support measures like loans to small businesses.
Source: vatcalc.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
