The cabinet approved a bill to cut the consumption tax on food and drink from 8 percent to 1 percent for two years and to add income-linked cash benefits.
Japan's cabinet on Friday approved a bill to temporarily cut the consumption tax on food and drink and to introduce an income-linked cash benefit for lower earners, Kyodo News reported. The government wants the measure passed in the current extraordinary Diet session, which runs through 12 December.
The tax on food and drink products would fall from 8 percent to 1 percent for two years from April, Kyodo said. Jiji Press described the same cabinet decision and said the cut would be the first since the consumption tax was introduced in 1989. Prime Minister Sanae Takaichi has argued the package is the fastest way to help households facing inflation.
About 10 trillion yen, roughly 63 billion dollars, is expected to be lost in tax revenue over two years, Kyodo reported. Finance Minister Satsuki Katayama said the government will identify funding sources in the forthcoming budget process. The cabinet had approved the plan in August, and a tax-reform package last month became the basis for the bill.
The legislation still needs Diet passage. Approval by the cabinet is not enactment. Opposition parties have not been quoted in these two reports on the Friday vote.
No start date other than April, and no household-by-household payment table, was published in the Kyodo or Jiji accounts used here.
People Sentiments Mixed
- Takaichi has said the measures are the best way to help people facing inflation.
- Katayama said funding sources will be identified in the budget process.