Prime Minister Sanae Takaichi’s Cabinet approved a controversial plan Wednesday to drop the food consumption tax from 8% to 1% for a two-year period beginning next April.
But while the majority of the Liberal Democratic Party has endorsed the cut, it’s created a backlash within the party, as prominent veterans have voiced public opposition to lowering the tax rate, fearing it will lead to economic and political chaos.
Wednesday’s Cabinet approval will set the stage for introducing legislation in the autumn session of parliament to amend the consumption tax law in order to reduce the rate. In addition, payments will be provided to low- and middle-income families, effectively bringing the tax rate to zero, in line with an LDP campaign pledge made prior to February’s Lower House election.