Takaichi Goes Forward to Consumption Tax Cut
Prime Minister Sanae Takaichi announced her idea to the Liberal Democratic Party to introduce temporary consumption tax rate for foods at 1 percent for two years starting from next April. Although she had received a report from the National Council on Social Security, Takaichi decided to ignore opinion of the opposition parties that was against consumption tax cut. Takaichi believes that her policy will work to mitigate impacts of price inflation, but it has many problems. Consumption tax cut was in Takaichi’s policy platform for February Lower House election. It was designed as a measure for the period before the government would introduce refundable tax credit. Although Takaichi hoped to receive a report from the national council that would recommend consumption tax cut to 1 percent, the opposition parties did not agree with the consumption tax cut, supporting direct subsidies for households. The council wrapped up its report with options of both consumption tax cu...