Japan Govt OKs Consumption Tax Cut Plan

Tokyo, Aug. 5 (Jiji Press)--The Japanese government Wednesday approved a plan to lower the consumption tax rate on food from 8 pct to 1 pct for two years from next April as a measure to cushion the impact of inflation.

After the ruling coalition of the Liberal Democratic Party and the Japan Innovation Party completed their internal procedures on the plan earlier in the day, it was adopted at an extraordinary cabinet meeting.

The government plans to introduce a cash benefit program for low- and middle-income earners in order to offset their consumption tax burden for food, thereby realizing an effectively zero pct tax rate for food.

The government is slated to adopt a tax system reform package in September and submit legislation to implement the consumption tax cut to an extraordinary session of the Diet, the country's parliament, expected to be convened in autumn.

This would be the first reduction in consumption tax since its introduction in 1989.

[Copyright The Jiji Press, Ltd.]