PM Takaichi Leaves Open Bond Issuance to Fund Food Tax Cut
Tokyo, Oct. 19 (Jiji Press)--Japanese Prime Minister Sanae Takaichi on Monday left open the possibility of issuing government bonds to fund the envisaged reduction in the consumption tax on food items, despite her previous claim that the necessary funds would be secured without relying on such bonds. "We will appropriately control the amount of government bond issuance (for the whole year)....
Japanese Prime Minister Sanae Takaichi suggested on Monday that the government may issue bonds to finance a planned reduction in the consumption tax on food items. This stance contradicts her earlier assertion that the required funds could be obtained without resorting to bond issuance. During a budget committee questioning in the upper house of Japan's parliament, Takaichi stated that they would "appropriately control" the level of government bond issuance for the year, but did not rule out using bonds to fund the tax cut.
The government plans to lower the 8% consumption tax rate on food to 1% for a two-year period beginning next April and implement an income-linked benefit program. Both measures are projected to necessitate approximately 10 trillion yen in funding over the two-year timeframe. Takaichi emphasized that the government would review its policy priorities and insisted that this move was not aimed at eradicating the benefits of tax cuts or increasing government spending.
Chief Cabinet Secretary Minoru Kihara clarified during a subsequent press conference that Takaichi's comment regarding government bond issuance was made in the context of the overall budget formulation process.
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