Japan PM Takaichi Announces 2-Yr Consumption Tax Cut Plan

Tokyo, July 30 (Jiji Press)--Japanese Prime Minister Sanae Takaichi on Thursday officially announced a plan to cut the consumption tax rate on food to 1 pct for two years starting next April.

The government plans to lower the food tax rate to virtually zero through the envisaged consumption tax cut and cash benefits distributed to low- and middle-income earners that are equivalent to the 1 pct tax.

This will be the first reduction in the consumption tax since its introduction in 1989. The consumption tax rate on food products is currently set at 8 pct.

The government will "secure funding without relying on deficit-covering bonds, in order to gain market confidence," Takaichi told reporters at the prime minister's office in Tokyo, citing possible resources, such as reviewing special tax measures and subsidies.

"In two years' time, I will take responsibility and make sure that the tax rate is restored to the current level," she said.

[Copyright The Jiji Press, Ltd.]