CDPJ Pledges Zero Consumption Tax on Food for 1 Year; Noda Adopts Opposite Stance to Time as PM

The Yomiuri Shimbun

16:48 JST, April 26, 2025

The main opposition Constitutional Democratic Party of Japan has adopted a proposal to cut the consumption tax rate on food items to zero for a year, as part of its campaign pledges for the House of Councillors election this summer.

The party made the decision at an extraordinary executive board meeting on Friday.

A single extension to the consumption tax measure would be permitted depending on the economic situation. Following the temporary cut, a “refundable tax credit system” would be introduced, which would combine income tax exemptions and benefits.

“We need to face the reality. People living today are in dire straits,” CDPJ President Yoshihiko Noda said at a press conference after adopting the proposal.

“We will not rely on deficit-covering bonds or place a burden on local government finances and future generations,” Noda said. He instructed the party’s Policy Research Committee Chairperson Kazuhiko Shigetoku to consider the matter.

But even if the consumption tax plan is realized, the earliest it can be implemented is next year. Therefore, the party will consider separate measures to deal with soaring consumer prices in the short term.

The CDPJ advocated the refundable tax credit system in last year’s House of Representatives election. It aimed at reducing the consumption tax burden for low- and middle-income earners through tax exemptions and benefits.

Noda and other party executives have been cautious about consumption tax cuts, instead emphasizing fiscal discipline. But the party’s stance has changed due to concerns among mid-ranking party members that it might be left behind by other opposition parties that are calling for lowering the consumption tax rate ahead of the upper house election.

The Democratic Party for the People and Reiwa Shinsengumi have been gaining popularity by calling for tax cuts in the run-up to the upper house election.

As prime minister, Noda decided to raise the consumption tax rate. He has now moved in the opposite direction apparently due to increasing calls for tax cuts from within the party, prompting some to question the consistency of his political stance.

Noda spoke about his mixed feelings regarding the decision when he announced the temporary consumption tax cut.

In 2012, when he served as prime minister, he decided to gradually raise the consumption tax to 10% to cover social security costs in a three-party agreement with the Liberal Democratic Party and Komeito.

At a CDPJ speech event in Kanagawa Prefecture on April 13, one of the party’s prospective candidates for the upper house election spoke about a proposal to reduce consumption tax rate for food items to zero as the party’s top policy.

Those calling for tax cuts welcome Noda’s decision. “I’m relieved that the proposal will be part of the party’s election pledges,” said lower house member Kenji Eda, who launched a group in December demanding the consumption tax rate on food be reduced to zero. He indicated that the decision would help the party cooperate with others calling for tax cuts.

But the party has more than a few members who oppose the tax cuts due to their emphasis on fiscal discipline. At a meeting with supporters on April 12, former party leader Yukio Edano criticized his colleagues calling for tax cuts, saying, “Please form another party if you want to resort to tax-cut populism.”