Japan’s ruling camp to call for sales tax cut, Yomiuri reports

Japan’s ruling coalition is considering requesting the government to cut the sales tax rate as part of measures to cushion the economic blow from rising costs of living and US tariffs, the Yomiuri newspaper reported on Friday.

The tax cut will be put in place temporarily and target food items, which have seen prices rise steadily, the paper said, citing sources close to Komeito, which is the ruling Liberal Democratic Party’s (LDP) coalition partner.

“The most effective measure is to directly ease the burden of households and companies with tax cuts,” Komeito head Tetsuo Saito said at his party’s meeting on Thursday, according to Yomiuri.

As implementing tax cuts would take time as doing so would need parliament to pass legislation, the government should also deliver cash payouts to households, he was quoted as saying.

But some LDP officials are cautious of cutting the sales tax as the levy is a key source of revenue to pay for ballooning social welfare costs of Japan’s rapidly ageing population, the Yomiuri said.

Japan’s sales tax rate is currently 10 percent with a lower 8 percent rate applied to food items.