Decision on food consumption tax cut may not come in June as planned

I've fact-checked the Government's feeble excuses for not reducing the tax many times. I'm not even going to bother this time.

Cost of living is the most important issue. The LDP should taking a hammering for this but the article sounds like it's the opposition's fault for criticizing the draft. Isn't it the government's for not saying how they will make up for the expenditure shortfall? A legitimate question.

Also, Kyodo.

Why cannot politicians’ leaders in this case Prime Minister Sanae Takaichi simply hold her hands up and admit such an election pledge promise was always going to be non-starter 

Call it a rush of blood to the head, causing the mouth, gob to flap uncontrollably 

There is no get out clause, the consumption tax generates the highest tax revenue for central government, above personal income tax 28.2%, corporate income tax 23.8%

Yes, consumption tax accounts for 33.3% of general account tax revenue.

Here is another unescapable mount fuji sized fact,

Consumption tax is entirely dedicated to funding social security, pensions, healthcare, nursing care for the aging population.

How will any government get round that wrinkle?

Only a complete restructuring reform of Japan entire tax system, the lost third arrow, can come close to achieving such a promise, what in all seriousness do you think are the chances of that happening?

How much sales tax is collected from selling food in stores?

> Japan's ruling party led by Prime Minister Sanae Takaichi is increasingly likely to miss its envisioned end-of-June deadline to reach a decision with other parties on cutting the consumption tax on food and beverages due to outstanding differences

Absolutely NO ONE is surprised at that.

I have said this for years that with the increase of tourists in Japan the govt should lower the income tax rate for locals but raise consumption tax so the tourists help support the place.

Wallace, that is a fair point, I assume that 600 billion yen, $3.76, close to 1% of tax revenue, NHK has suggested revenue would fall by 5 trillion yen.

I have lost trust in politicans, its the blatant waffling.

Now there’s a shocker! Must have more meetings to discuss the next meeting. So probably next year.

Raising sales taxes means pensioners and retired people would pay more.

I have said this for years that with the increase of tourists in Japan the govt should lower the income tax rate for locals but raise consumption tax so the tourists help support the place.

The opposition parties participating in the council criticized the government's draft, based on the LDP's proposal, for not clarifying how it would make up for the expected 10 trillion yen revenue loss resulting from the tax reduction.

Before the usual crew celebrate the possible failure of the Sanae leadership, cause anything will do, just remember they whoever it is, they are attempting to stall a bill that would help make it easier for poor people put food on the table. Just let that sink in for a moment if you can. It’s quite striking.

, a source close to the matter said Friday.

why the vagueness?

of course they will never admit to the precarious fiscal situation

The main concerns is primarily from a declining tax revenue raised by Japan local prefectures, also business communities across multiple sectors,

Another important point in question this tax consumption reduction proposal’s effectiveness to combat rising prices.

What mechanism would be in place to discourage supermarkets increasing prices to enhance profitability, only after the temporary reduction, consumers face cliff face price rises?

All causing a pickup in inflation

All could cause heavy selling in the government bond market, the yield on the benchmark 10-year bond could well rise to unprecedented proportions.

It is a political mine field to raise consumption tax after such a substantial cut.

Also, the tax cut would have a negative effect on farm income,

There are around 800,000 small and medium-sized farms across Japan

Maybe a cut to 6/7 percent to start?

A compromise perhaps ?

Prime Minister Sanae Takaichi a hardline conservative fiercely loyal, steadfast, unwavering promoter of "Abenomics" economic stimulus .

Mrs “Abenomics” 2.0, but where are the "third arrow" of structural reforms?

Maybe it would be far smarter to establish a multiyear framework to finance long-term reductions to Japan serious debt problem, through budget reforms.

A cross-party council on the issue was supposed to compile by next Tuesday its view on lowering the tax rate from the current 8 percent to 1 percent for two years starting April 2027, but it has become hard due to opposition parties' backlash, the source said.

I don't see how this is possible. Surely if the LDP have a lower house supermajority on their own and hence the power to over-rule the upper house if it votes against legislation passed by the lower house, opposition parties' backlash is irrelevant?

The opposition parties participating in the council criticized the government's draft, based on the LDP's proposal, for not clarifying how it would make up for the expected 10 trillion yen revenue loss resulting from the tax reduction.

I think that's a valid concern unless the government has a plan to cut ¥10 trillion in public spending.

Just sell your yen and forget about it.

Policies here are an absolute joke.

Not Holding My Breath.

It was just a election scheme.

"" for not clarifying how it would make up for the expected 10 trillion yen revenue loss resulting from the tax reduction .""

SIMPLE, for the next two years do the following:

Step one: cut the extra FAT and keep the productive government employees.

Step two: reduce bounces and retirement pay outs.

Step Three: Reduce waste in government spending on unwanted and useless construction projects like building an expressway that is only used by the very few with very minor traffic.

Step Four: Start clamping down on hospital and doctors overcharging over treating over prescribing medical services, hold them accountable to every charge they make.

for not clarifying how it would make up for the expected 10 trillion yen revenue loss resulting from the tax reduction.

This 10 trillion yen is just more fuel on the fire - government debt is in excess of 1,000 trillion yen, a quadrillion yen, last time I checked. (Can't imagine it has gotten much better)

1,343.84 trillion as of March I see...

10 trillion more is bad but it's almost a rounding error.

Sell your yen.

Immediately after the election February, against skepticism question about food tax zero, PM Takaichi responded with arrogant behavior and "dog-whistle", even incited harassment or slander against the questioner.

But, she hasn't yet been able to achieve it.

wallace

Raising sales taxes means pensioners and retired people would pay more.

I have said this for years that with the increase of tourists in Japan the govt should lower the income tax rate for locals but raise consumption tax so the tourists help support the place.

So give them a Gold Card like all other modern countries giving them discounts at food outlets. Also lowering the income tax rate would allow for further retirement savings.

the ruling bloc also proposed annual cash handouts totaling 600 billion yen, equivalent to the expected revenue from a 1 percent tax on food.

I can live with that too.

So give them a Gold Card like all other modern countries giving them discounts at food outlets. Also lowering the income tax rate would allow for further retirement savings.

I can't find any except NZ.

Call it a rush of blood to the head, causing the mouth, gob to flap uncontrollably 

Takaichi well known for that. Speaks without thinking. Triillions in yen vanish in thin air.