Japan Govt Adopts Economic Package; Including Plans to Raise ¥1.03 Million Threshold

Jiji Press

18:47 JST, November 22, 2024

TOKYO (Jiji Press) — The Japanese government on Friday adopted an economic package focusing on benefits for low-income households, subsidies for utility bills and aid for the disaster-hit Noto Peninsula in central Japan.

The economic package also includes assistance for cutting-edge industries and plans to raise the minimum annual taxable income from ¥1.03 million in order to increase take-home pay.

The government will assemble a fiscal 2024 supplementary budget to finance the economic package, earmarking around ¥13.9 trillion in general-account spending. Including related spending by the private sector, the economic package is worth around 39 trillion.

The package comprises three pillars—overcoming inflation, securing citizens’ safety and security, and promoting growth in the Japanese and regional economies.

For the latest package, the amount of general-account spending and its total size both exceed those in last year’s package.

Total fiscal spending, including under special government accounts, is expected to reach about ¥21.9 trillion .

Among measures to tackle inflation, the government will offer subsidies for household electricity and city gas bills in January-March 2025. It will pay ¥2.5 per kilowatt-hour of electricity and ¥10 per cubic meter of city gas in January and February before reducing the amounts in March. It will keep its gasoline subsidies in place beyond the end of this year, albeit on a smaller scale.

The government will give ¥30,000 each to low-income households exempted from residential tax payments, with an additional ¥20,000 for each child.

The package also includes support for the reconstruction of the Noto Peninsula, which was hit by a massive earthquake and torrential rains this year.

Under the package, the government will promote the stockpiling of makeshift beds and the introduction of air conditioning equipment at school gymnasiums that can be used as disaster evacuation centers.

The government will provide ¥10 trillion or more in aid by fiscal 2030 to promote the development of advanced semiconductors and artificial intelligence. It will also provide new grants to boost regional economies.

Under the package, the government said that it will raise the income tax threshold as part of fiscal 2025 tax system reform, as agreed by the ruling coalition and the opposition Democratic Party for the People.

It also said the government will discuss a gasoline tax cut, as part of a review of overall automobile-related taxation in line with the agreement by the ruling bloc and the DPFP.

The Cabinet Office estimates that the economic package will raise the country’s gross domestic product by about ¥21 trillion and lower consumer inflation by some 0.3 percentage point in February through April next year.