Tax cut to bring ¥36,000 benefit per citizen, Takaichi says

Prime Minister Sanae Takaichi announced on Friday that a planned consumption tax cut for food is anticipated to reduce household financial burdens by approximately ¥36,000 per citizen. Speaking at a Senate plenary meeting, Takaichi explained that this figure represents the average reduction in household expenses resulting from the tax rate cut, which will be passed on to consumers through lower prices.

The calculation of the ¥36,000 figure was derived by dividing the total tax revenue loss faced by central and local governments due to the tax cut by Japan's population. When questioned about how her administration would compensate for local government revenue losses, Takaichi pledged to fully fund these losses through state funds, stating, "We'll properly secure necessary local tax grants."

Additionally, the prime minister indicated that the government is exploring measures to support agricultural and fishery businesses, as well as food companies and restaurants that may be impacted by the tax cut, emphasizing the need to assess local circumstances and respond accordingly. Komeito Secretary-General Makoto Nishida urged the government to clarify eligibility criteria for a proposed financial aid program for workers accompanying the tax cut, to which Takaichi promised to provide details during parliamentary deliberations, pending discussions by the suprapartisan National Council on Social Security.

Sanseito leader Sohei Kamiya advocated for a uniform consumption tax reduction, arguing that exemptions for food could strain public services such as pensions, medical care, and nursing care. Takaichi countered this by highlighting potential negative impacts on these essential services.