Japan Mulls Plan to Cut Food Tax Rate to "Virtually Zero" Pct

Tokyo, June 18 (Jiji Press)--The chair of a Japanese suprapartisan panel has presented a proposal to lower the consumption tax rate on food to virtually zero pct to effectively fulfill Prime Minister Sanae Takaichi's campaign pledge of a zero pct food tax rate.

At a meeting of the working-level panel under the National Council on Social Security, panel chair Itsunori Onodera, head of the ruling Liberal Democratic Party's Research Commission on the Tax System, proposed lowering the tax rate to 1 pct for two years from next April.

At the same time, Onodera called for refunding tax revenue from a 1 pct tax rate, or around 600 billion yen per year, as "fine-tuned" benefits linked to income levels for low- and middle-income earners.

The national council aims to reach an interim agreement on the matter by the end of this month to leave the final decision to the prime minister.

The proposal comes as the industry ministry has estimated that it would take up to around 10 months to a year to adjust cash register systems for a zero pct tax rate but only up to around five to six months for a 1 pct tax rate.

[Copyright The Jiji Press, Ltd.]