Kishida to Instruct Ruling Parties to Discuss Tax Cuts; Komeito Head Says Measures May be Planned by Year-End

Yomiuri Shimbun file photo
Prime Minister’s Office

Prime Minister Fumio Kishida plans to instruct the tax commissions of the ruling Liberal Democratic Party and Komeito to come up with specific steps for tax reductions as a way to return increased tax revenues to the public, it has been learned.

The prime minister will speak about his plan in his policy speech to be made on Monday during the extraordinary Diet session slated to be convened Friday.

Discussions at the LDP’s Research Commission on the Tax System and its Komeito counterpart will include income tax cuts.

The focus is on whether the government will implement income tax cuts. Kishida is expected to ask the ruling bloc tax commissions to consider the income tax cuts as a temporary measure, rather than a permanent one.

According to a draft of the policy speech, the prime minister will emphasize, “A portion of the increase in tax revenue will be ‘returned’ fairly and appropriately so that burden on the people from high prices will be eased.”

The speech will express recognition that wage increases are not keeping up with price increases and will present the policy of returning a portion of increased tax revenue to the public as “temporary mitigation measure for the total exit from deflation.”

Then, the draft says the government and the ruling parties will hold a policy meeting soon and that the government will instruct the ruling parties’ tax commissions to hold discussions soon. Specific tax items to be discussed for cuts are not likely be mentioned in the policy speech.

On this matter, Kishida met with Komeito leader Natsuo Yamaguchi at the Prime Minister’s Office on Tuesday. According to Yamaguchi, he and the prime minister affirmed that the ruling camp’s tax commissions should discuss tax cuts and come up with specific measures by the end of this year.

After the Kishida-Yamaguchi meeting, the LDP and Komeito submitted their own proposals on economic measures to Kishida. The proposals did not include income tax cuts. The LDP proposals call for “bold steps to implement budgetary measures, tax reforms and institutional reforms in one package.”

Komeito’s proposals call for necessary measures to be implemented in the tax changes in fiscal 2024.

Both parties also proposed extending measures to ease the burdens of gasoline and utility bills. They also call for providing benefits to lower-income households and enhancing tax incentives for small and midsize companies that strive for wage increases.