Takaichi: Aiming to submit tax cut bill by summer if finalized

Takaichi: Aiming to submit tax cut bill by summer if finalized

Takaichi: Aiming to Submit Tax Cut Bill by Summer If Finalized

Japanese Prime Minister Sanae Takaichi has outlined plans to accelerate the submission of legislation to cut the consumption tax on food items to zero for a two-year period, as part of her government's fiscal and economic policy agenda. The proposal, a key election pledge by the Liberal Democratic Party (LDP), aims to alleviate household costs while balancing fiscal responsibility.

In an upcoming policy speech to the special 150-day Diet session convened on February 18, Takaichi will emphasize the need for "responsible proactive finances" and a shift away from excessive austerity. A bipartisan national council, comprising ruling and opposition parties and experts, will expedite discussions on the tax cut's implementation, including funding sources and timelines. The council aims to compile an interim report by summer, enabling the submission of related bills to the Diet at an early date. Japan's current consumption tax rate stands at 10% for most goods, with food and certain other items taxed at 8%.

The government also plans to introduce a multiyear budget management framework to reduce the debt-to-GDP ratio and stimulate growth. Takaichi has pledged to unveil a roadmap for public-private partnership investments and a broader strategy to adapt the social economy to Japan's declining population.

On foreign investment, Takaichi announced plans to review land acquisition restrictions for foreigners and advance resource extraction projects for rare earth elements near Minamitorishima Island, signaling efforts to bolster strategic resource security.

While the LDP's recent electoral victory provides a legislative mandate, challenges remain in securing cross-party support for the tax cut and addressing fiscal sustainability. The interim report's findings will be critical in shaping the final legislative approach, with implementation dependent on the Diet's approval timeline. Investors will closely monitor progress, as the measures could influence consumer spending, public finances, and Japan's broader economic resilience.