Consumption tax cut, deliberations in full swing, financial resources not shown, discussions not working

On the 23rd, full-scale deliberations on the consumption tax reduction bill that the government and ruling party aim to pass this session began in the House of Representatives Finance and Finance Committee. In addition to funding sources for tax cuts, the opposition party called for a system design for a ``employee burden reduction support subsidy'' linked to income, but Finance Minister Satsuki Katayama only said, ``We will present a concrete image in the future budget-formulation process,'' and the discussion remained inconsistent.

The main thrust of the bill is to reduce the consumption tax rate on food products from 8% to 1% for two years starting April next year, provide an advance payment of the equivalent of 1% to middle- and low-income earners, and introduce the full-scale support in fiscal 2029. Although the focus is on securing financial resources amounting to approximately 10 trillion yen, Mr. Katayama continued on this day with his usual explanations, including non-tax income, special tax measures, and a review of the fund.

Regarding the tax cut, some are questioning its effectiveness in lowering retail prices in a climate of inflation. Mr. Katayama said, ``I have no intention of forcing business operators to lower prices,'' indicating his stance of allowing the cost increases to be passed on to prices. He also stressed that ``opportunistic price increases (taking advantage of the tax cut) and aggressive purchases will never be tolerated.''

Regarding the tax hike in two years' time, he said, ``If we get into an extreme recession, we will take the necessary measures,'' hinting at the possibility of it being postponed.