Consumption Tax Cut Discussion Group Holds 1st Meeting; Plans to Produce Interim Report by Summer

The Yomiuri Shimbun

16:38 JST, March 13, 2026

A working-level group formed by the cross-party national council on social security, tasked with looking into a possible consumption tax cut on food and refundable tax credit policy, held its first meeting in the Diet Building on Thursday. Participants included the government, the Liberal Democratic Party, the Japan Innovation Party, Team Mirai and the Democratic Party for the People. They will discuss specific measures and produced an interim report before summer.

The working-level group was established as a subsidiary of its parent council, which launched on Feb. 26. While the DPFP did not attend the parent council’s first meeting, it decided to participate after certain demands, such as making proceedings public, were accepted. The three parties called upon by the government and ruling coalition to participate — the Centrist Reform Alliance, the Constitutional Democratic Party of Japan and Komeito — refrained from attending.

“This will significantly impact the national economy and the benefits and burdens experienced by the people. We will discuss this beyond party lines,” said Itsunori Onodera, chairman of the LDP Research Commission on the Tax System, who is also chair of the working group, at the start of the meeting.

At the meeting on Thursday, the government explained some previous cases in which the governments of other countries, including Britain, France and the United States, have introduced refundable tax credit systems combining tax cuts and benefits. The participants affirmed that they would take in opinions from entities that would be affected by a reduction in the consumption tax, including businesses in the retail, restaurant and agricultural industries.

Prime Minister Sanae Takaichi has advocated for setting the consumption tax rate on food items to zero for two years as a “bridging measure.” However, the DPFP and Team Mirai remain cautious. “Concerns outweigh positive expectations” said Aoi Furukawa, Mirai’s policy research council chair, and others at the meeting expressed similar sentiments. Even some LDP members are resistant to reducing the consumption tax, which serves as a key source of social security funding.

On the other hand, both parties are positive about introducing the refundable tax credits, which Takaichi has positioned at the heart of the planned reforms. DPFP acting representative Motohisa Furukawa emphasized at the meeting that he has been advocating the idea for a long time.

“We want to actively cooperate to make it a reality,” he said. The party has compiled its own proposal for combining a resident tax deduction with social insurance premium refunds and plans to present it to the group.

There are numerous obstacles to implementing refundable tax credits, such as verifying people’s income and assets.

“We should start with a simpler approach and gradually improve its precision,” former Health, Labor and Welfare Minister Norihisa Tamura of the LDP said.

The issue had barely been discussed within the LDP before the prime minister signaled her support, and the reality is that they “are starting discussions from scratch,” in Onodera’s words.

Going forward, an expert panel will organize key points for discussion, and working-level talks will be held weekly.