Japanese PM Takaichi Tells Finance Minister Katayama to Speed Up Discussion toward Consumption Tax Cut

The Yomiuri Shimbun

14:41 JST, February 14, 2026

Prime Minister Sanae Takaichi, during a Thursday meeting held at the Prime Minister’s Office, directed Finance Minister Satsuki Katayama and senior ministry officials to speed up talks targeted at realizing a consumption tax cut, it was learned Friday.

The government is tentatively planning to look for ways to secure financial resources to pay for the tax cut during an inter-party national council in June and then to pass the necessary bills during the autumn extraordinary Diet session.

According to multiple senior government officials, Takaichi, on Thursday, talked with Katayama and other ministry officials about the introduction of a system of “tax credits with cash payments,” which would combine income tax cuts and cash payments, and about ways to implement the consumption tax cut as a bridging measure until this system could be established.

At the meeting, Takaichi expressed the view that some within the ministry had been taking a cautious approach to cutting the consumption tax. She directed these people to “hurry up and get things ready,” in view of will of the people as shown by the results of the recent House of Representatives election. A senior ministry official said on Friday, “We are now fully set [on pursuing a consumption tax cut].”

The government plans to discuss both the tax credit and cash payment system and the consumption tax cut at the national council.

Chief Cabinet Secretary Minoru Kihara said at a press conference on Friday, “We’d like to set up the council as soon as possible and quickly proceed with the discussions.”

The biggest challenge will be finding a way to secure financial resources to replace the ¥5 trillion a year that will be lost from reducing the food consumption tax rate to zero. At a press conference on Friday, Katayama said, “We must arrange things so that we can get an interim report ready by June, before summer.”

Within the Prime Minister’s Office, discussions are progressing, with the aim of enacting all the necessary bills during the autumn extraordinary Diet session and implementing the tax cut some time next year.

As a tax cut of this kind imposes certain burdens on businesses, such as requiring them to modify their computer systems, the government in the past has set preparation periods of one and a half years or more between the time when the related laws were promulgated and when they were put into force.

Similar issues are also expected to emerge this time, making the timing of this tax cut’s implementation another point of concern.