Japanese Junior Coalition Party Advocates for Discussion on Income Tax Cuts, According to Reuters

By Takaya Yamaguchi

TOKYO – The head of the tax panel for the Komeito party, a junior coalition partner of the ruling Liberal Democratic Party (LDP), emphasized the need for a comprehensive discussion regarding a contentious proposal to reduce income tax next year.

Makoto Nishida, who leads Komeito’s tax panel, stated that policymakers should remain open to the possibility of extending the tax cut beyond 2024, rather than confining it to just one year.

"A flexible approach is necessary due to various considerations, such as the potential for monetary normalization and the ongoing developments in conflicts within the Middle East," Nishida remarked to reporters, as lawmakers began their internal discussions on tax policy.

Prime Minister Fumio Kishida of the LDP has plans to implement income tax reductions for the upcoming fiscal year as part of an overarching economic strategy aimed at increasing household incomes and stimulating consumption.

However, opposition lawmakers have criticized the proposed income tax cuts, labeling them as politically motivated and potentially ineffective. They argue that such measures could take time to realize their benefits and might exacerbate Japan’s already significant debt burden, which is the largest among developed nations.