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Komeito leader says panel to discuss lower sales tax on essential items

20 Comments

Natsuo Yamaguchi, leader of the ruling Liberal-Democratic Party's coalition partner, the Komeito Party, says a panel will begin discussions later this month on legislation to reduce the sales tax on daily essentials such as food and other products when the next hike is implemented in April 2017.

Yamaguchi said he hopes the legislation will be ready to be enacted in the Diet by next autumn, TV Asahi reported Saturday.

The sales tax had been scheduled to be increased from 8% to 10% next October, but it was delayed until April 2017 by Prime Minister Shinzo Abe in November.

Last April, when the tax went up from 5% to 8%, the government came under pressure from consumer groups urging that daily necessities such as food and medicine should either be exempt or subjected to a lower tax rate so as to ease the burden on households.

The LDP and Komeito made the new policy part of their campaign platform in the lead-up to the lower house election on Dec 14.

Speaking to reporters on Friday, Yamaguchi did not say by how much the sales tax will be reduced or exactly what items will be involved.

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20 Comments
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Oh...so now it magically isnt going to " create confusion for public" ?which was the ridiculous argument to govt. and bureaucrats used when discussing the first sales tax hike? Still, better than mothing, but lets see how low the "liwer rates will be " My guess is there will be no cut, they,ll leave some food and few other things at 8% then hike everything else to 10%.

3 ( +5 / -2 )

Oh yes, totally agree that nothing will be reduced on "essentials". More likely than not, like marcelito said, is the preferred path for the government. And why would the government try and lower the sales tax for some items? That would just create confusion for the public, wouldn't it? Give me a break!!

0 ( +1 / -1 )

How about not taxing ALL FOOD like most civilized counties in the world? Even the Roman Empire didn't tax food.

3 ( +3 / -0 )

Essentials....it bugs me to think that those with silver spoons in their mouths will be telling joe-public here what is essential and what isn't. So much is already subsidized heavily that this too will become a ponzi-game.

0 ( +0 / -0 )

While reducing the tax on essentials sounds good in principle, it's a slippery slope. Next it will be anything to do with children, then education, after that the elderly. The system will become unweildy and a magnet for special interests. It's far easier just to collect tax on everything and then provide low income people with a rebate through their taxes.

In Canada, the system is so complicated that there is sales tax on a single donut but no sales tax if you buy 6 or more donuts... the rationale is that 6 donuts might be eaten by a family with children and the policy is not to tax food eaten by children. It's a nightmare.

-1 ( +4 / -5 )

I think no tax on all food is a pretty good idea.

3 ( +3 / -0 )

Start with no sales tax on unprepared food. Pretty much everything in a supermarket except the "deli-ish" corner (Bento, fried chicken,etc.,). Take off all tax on beer, because I like Japanese beer.:-)

1 ( +2 / -1 )

I think no tax on all food is a pretty good idea.

I would generally agree with this however I do believe that high end items, like 16,000 yen mangoes, 10,000 yen melons, high end meats, etc should be taxed as they are not essentials.

Also junk food should also be taxed as well.

5 ( +5 / -0 )

This should have been part of the original tax reform draft. When the Aus govt. introduced the GST (went from 5% to 10%) about 20 years ago, 'essentials' were exempt from the hike. Australia has the highest rate of inflation on foodstuffs in the world, with a 40% increase each decade. I could see Japan heading in the same direction if changes aren't made...

0 ( +0 / -0 )

I think that some states in the U.S. there is no tax on all consumables purchased at a grocery store. But any food bought at a restaurant is still taxed because the restaurant is providing a service.

0 ( +0 / -0 )

When government parties say they are setting up a "panel" to discuss something, they always seem to pick people who tend to agree on what the party in question suggests. Why don't they select some real working people with families. People who will experience consumption tax hike effects first-hand. Listen to what they have to say, then try to work out solutions to keeping prices in check for the ordinary citizen.

3 ( +3 / -0 )

I can just see what 'essential' will mean to the government: construction materials related to building Olympic venues, fine wine for wining and dining diplomats, prostitutes (for government officials and those they need to bribe), and other related 'goods'. But food in general? medical needs? postage? nah.

4 ( +5 / -1 )

Well, they should put a tax on SLEEPING CASH, if you own more than 10 millions yen in cash, you should pay a special tax proportional to the amount of cash sleeping in your bank account, and people injecting their cash on local economy should be rewarded by the govt, let's make a JP kickstarter type of funding, furthermore lower the consumption tax to 0, that would be fair and give a a real boost to the economy, instead of spending trillion we do not know where for a total sum of zero effect.

-4 ( +1 / -5 )

SLEEPING CASH, if you own more than 10 millions yen in cash, you should pay a special tax proportional to the amount of cash sleeping in your bank account, and how stupid is that, people will just withdraw all surplus cash over 10 milion and store it in the home safe. I would.

4 ( +4 / -0 )

I think that some states in the U.S. there is no tax on all consumables purchased at a grocery store. But any food bought at a restaurant is still taxed because the restaurant is providing a service.

It's not even close to the same thing. The US has no national consumption tax. The taxes you are referring to are state sales taxes.

0 ( +0 / -0 )

You can not compare some states in USA and Japan. Some state has huge income from the industry that Japan do not have. We have to pay US tax.Even there is neither income nor corporation tax by our state, Japan Inc avoided to move to our state. State sales tax has to be put on agenda before election. Voters decide aye or nay. You just can not compare Japan and some states in USA that are rich in National resources and Govt are not used to ignore voters.

0 ( +1 / -1 )

Komedoeito have traditionally done what the ruling party have ordered, they have no power no hope. Pathetic party that garners tax dollars while doing nothing. A panel to discuss tax....see where this is going.

1 ( +1 / -0 )

Well, they should put a tax on SLEEPING CASH, if you own more than 10 millions yen in cash, you should pay a special tax proportional to the amount of cash sleeping in your bank account, and people injecting their cash on local economy should be rewarded by the govt, let's make a JP kickstarter type of funding, furthermore lower the consumption tax to 0, that would be fair and give a a real boost to the economy, instead of spending trillion we do not know where for a total sum of zero effect

.........W............T.............F!....... forget the sums you mention the concept is completely daft!!!

You can not compare some states in USA and Japan. Some state has huge income from the industry that Japan do not have. We have to pay US tax.Even there is neither income nor corporation tax by our state, Japan Inc avoided to move to our state. State sales tax has to be put on agenda before election. Voters decide aye or nay. You just can not compare Japan and some states in USA that are rich in National resources and Govt are not used to ignore voters.

Toshiko, you might want to try to re-word that as its hard to understand, I am not criticizing you as I know English isn't your 1st language

That said Japan has & is creating many SEVERE problems with its taxation, its very scatter brained, lots of double taxation......

And it is getting VERY PAINFUL for families with low income, THERE SHOULD BE NO TAX ON FOOD!!! Japan needs a massive re-think wrt taxation but I don't expect the authorities to even comprehend the difficulties of Japans most vulnerable!!!

-1 ( +0 / -1 )

This is bad policy, and that the religious cult backed Komeito party is leading the charge ought ring alarm bells for those in favour.

Policy should be judged on how well it meets it's objectives.

What is the goal of this policy? So far as I understand, it's to make things a bit easier for low income earners.

But as a result of this policy, all the rich people and otherwise middle class people who can easily afford to pay consumption tax for rice, bread, caviar, whatever it is they eat, will also enjoy the lower tax rate on whatever these essential goods might be.

That's tax revenue that I recall is supposed to have been earmarked for social security spending. So how is the gap in social security spending to be paid for?

This is bad policy. M3M3M3 had it exactly right, yet got negative votes. Unbelievable.

1 ( +1 / -0 )

A wages and incomes policy, in all but name. The worst of both worlds, back to the 70's, need to deal with the fundamentals, reform and restructure tax and employment, deliver the mandate, the consequences of failing to do so will continue the decline in services, bring higher borrowing, lower the population. A final warning for shameful J Corporate, irrespective of government, deliver or treacherously betray a nation. This government must exercise the mandate effectively and force through growth if necessary.

0 ( +0 / -0 )

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