Prime Minister Sanae Takaichi said Tuesday her government will not extend a cut in consumption tax on food and beverages beyond the planned two years from April for economic reasons, as parliamentary deliberations on the bill for the policy began.
Asked whether she intended to “seek public mandate” on whether the rate should be returned to its original 8 percent from 1 percent, Takaichi told the Diet she plans to end the tax measure in March 2029.
“Revenue from the consumption tax is a vital source of funding for social security, so we are committed to restoring the tax rate in two years (from next April), given the importance of fiscal sustainability and maintaining the market’s trust” in public finance, she said.
Referring to the need for financial preparedness to deal with large-scale disasters or infectious disease outbreaks, Takaichi said that it is unpredictable when or how such situations could arise and the government should respond “flexibly.”
The government submitted the bill for the tax reduction, together with a benefit program for low- and middle-income earners, to parliament earlier this month, aiming for the passage during the current 69-day extraordinary session through mid-December.
