Govt to Set Working-Level Meeting Group for Refundable Tax Credits Under National Council to Discuss Consumption Tax

The Yomiuri Shimbun

16:49 JST, February 26, 2026

The government intends to establish a working-level meeting group in charge of designing a “refundable tax credit” system, which combines income tax cuts with benefits, under the national council for social security that will consider measures such as consumption tax cuts for food items, according to the outline drafted by the government.

An expert panel, including representatives from the business community and local governments, will also be formed to collaborate in discussions.

The inaugural meeting of the national council was held at the Prime Minister’s Office on Thursday evening.

Participants in the inaugural meeting were to include Prime Minister Sanae Takaichi; relevant Cabinet ministers such as Finance Minister Satsuki Katayama and Health, Labor and Welfare Minister Kenichiro Ueno; Takayuki Kobayashi, the ruling Liberal Democratic Party’s Policy Research Council chairperson; Fumitake Fujita, coleader of the ruling coalition partner Japan Innovation Party; and Team Mirai leader Takahiro Anno.

The government has urged opposition parties to participate in the national council. But the Centrist Reform Alliance and the Democratic Party for the People said Thursday that they would not be present at the first meeting at least.

The draft outline explicitly states the council will be “jointly held by the government and political parties that share an awareness of the consumption tax as a valuable source of revenue for social security and work to realize refundable tax credits.”

In addition to the main national council, the government plans to establish a “working-level meeting group on refundable tax credits” to facilitate flexible and focused discussions between government officials and working-level members from each party.

Furthermore, an “expert panel” will be formed to scrutinize specialized and technical issues, with its chairperson participating in the main national council meeting as needed.

Discussions on consumption tax cuts and refundable tax credits will proceed in parallel, and an interim report is expected before summer.

The government intends to reflect the interim report in the Basic Policy on Economic and Fiscal Management and Reform, then decide on a system of refundable tax credits at a Cabinet meeting and submit related bills to the Diet.

During interpellations by representatives of each party at the Diet on Wednesday in response to Takaichi’s recent policy speech, DPFP leader Yuichiro Tamaki stated, “We don’t rule out participating in the national council,” while raising 10 points of concern regarding consumption tax cuts, including the timing of implementation; measures for the restaurant industry, which would not be subject to tax cuts; concerns about a tax increase two years later; and securing funding sources.

Junya Ogawa, leader of the CRA, also said, “There isn’t sufficient information [to decide on participation]. The ruling parties should present concrete proposals.”