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

Prime Minister Sanae Takaichi said Friday that the planned consumption tax cut for food is expected to reduce household financial burdens by about ¥36,000 per citizen.

“The tax rate cut will basically be reflected in prices,” Takaichi said at a plenary meeting of the Senate, the upper chamber of parliament.

She explained that the ¥36,000 figure was calculated by dividing the total tax revenue loss to the central and local governments from the tax cut by the country’s population.

During the Upper House meeting, Yasue Funayama of the Democratic Party for the People asked the prime minister how her administration will make up for local government revenue losses.

Takaichi vowed to fully cover these revenue losses with state funds, saying, “We’ll properly secure necessary local tax grants.”

The prime minister also said the government is considering measures to support agricultural and fishery businesses, as well as food companies and restaurants whose operations could be affected by the tax cut. “It is necessary to assess circumstances on the ground and respond according to the impact on each sector,” she said.

Meanwhile, Komeito Secretary-General Makoto Nishida called on the government to clarify who would be eligible for a financial aid program for workers that will be introduced alongside the consumption tax cut.

Takaichi indicated that the government will explain the matter during parliamentary deliberations, based on discussions by the suprapartisan National Council on Social Security.

Sanseito leader Sohei Kamiya argued that the consumption tax reduction should apply across the board, not only to food.

Takaichi countered that such a move could affect public services, including pensions, medical care, nursing care and measures to address the declining birthrate.