Minister leaves open possibility of gasoline tax cut

Jiji Press

18:48 JST, January 30, 2022

TOKYO (Jiji Press) — Japanese industry minister Koichi Hagiuda said Sunday that he does not rule out the possibility of lifting the freeze on a scheme to cut gasoline tax temporarily.

The government Thursday activated a new program to provide oil wholesalers with subsidies to help slow the current surge in the prices of gasoline and other oil products.

In a television program Sunday, Hagiuda indicated that the government will consider the tax cut scheme as one of options to curb gasoline prices if crude oil prices continue to be high.

The scheme cuts the gasoline tax to ¥28.7 per liter from ¥53.8 when the average retail price of gasoline tops ¥160 per liter for three straight months.

The rule was created when the former Democratic Party of Japan was in power. But it has been put on hold in order to secure funds for the reconstruction of areas damaged by the March 2011 powerful earthquake and tsunami.

The government has so far been negative about lifting the freeze. Prime Minister Fumio Kishida has said that it is not appropriate to use the scheme, which could cause tax revenue to fall and make consumers hold back purchases in anticipation of price falls.

Hagiuda, while noting that he has been considering using the tax cut scheme since taking office, said that the government first opted to establish the subsidy program.

He added that the government needs to consider effectively using the tax cut scheme as well.