LDP Begins Mulling 2027 Income Tax Hike to Fund Defense Spending

Tokyo, Dec. 5 (Jiji Press)--Japan's ruling Liberal Democratic Party on Friday began discussions aimed at increasing the income tax rate in 2027 as part of efforts to secure financial resources for a hike in the country's defense spending.

The tax hike plan was included in the fiscal 2023 tax system reform outline, but the start date had not yet been set. The ruling party determined that securing necessary funding for national security could not be delayed any longer.

But some in the LDP's coalition partner, Japan Innovation Party, also known as Nippon Ishin no Kai, are opposed to the proposed tax increase.

"We believe that clearly showing Japan's stance on national security, including the funding source, will lead to improved deterrence," LDP tax chief Itsunori Onodera told reporters the same day.

Under the LDP's plan, the current income tax rate will be raised by 1 percentage point, while the rate of a special income tax to fund revitalization efforts following the 2011 major earthquake and tsunami that mainly struck northeastern Japan will be lowered by an equivalent of 1 point, meaning the burden on the public will not change for now.

[Copyright The Jiji Press, Ltd.]