The ruling party’s tax and social security committee approved a government
propose to cut the food consumption tax from 8% to 1% from April next year for
a two-year period. Cabinet approval is sought early next month and the
government aims to table legislation at an autumn extraordinary Diet session;
the party’s top decision body may review the draft as soon as Wednesday. From
June the plan includes roughly ¥600 billion a year in cash transfers to low- and
middle-income households, with payments scaled by income. Funding remains
unspecified; the government plans to rely on non-tax revenue, tax receipts and
savings from reviewing tax preferences and subsidies to plug the gap.
