Japan Govt to Avoid Deficit-Covering Bonds for Food Tax Cut

Tokyo, June 26 (Jiji Press)--The Japanese government on Friday presented a funding plan for the proposed reduction of the consumption tax rate on food items from 8 pct to 1 pct for 2 years starting next April, stating that it will avoid reliance on deficit-covering bonds.

The plan, presented at a working-level meeting of the suprapartisan National Council on Social Security, stipulated that the tax reduction will not rely on the bonds "to not undermine market confidence," suggesting a review of subsidies and special tax incentives, and additional nontax revenues as alternative sources.

The tax cut proposal was included in a related interim draft shown by the council's head on Wednesday.

The move to avoid the issuance of deficit-covering bonds follows a policy that Prime Minister Sanae Takaichi has consistently emphasized.

Still, the funding plan presented this time did not specify concrete measures for securing financial resources, instead deferring the issue by stating that the government will reach a conclusion during the process of compiling its budget for fiscal 2027, which starts next April.

[Copyright The Jiji Press, Ltd.]