Prime Minister Sanae Takaichi announced a plan at an extraordinary meeting of Liberal Democratic Party executives Thursday to lower the consumption tax rate on food and beverages to 1% for a two-year period starting next April.
The prime minister said that unlike previous systems that were criticized for providing uniform cash payments, the new plan takes a comprehensive view of the interplay between taxes, social insurance contributions and cash benefits to deliver support based on income and other factors.
¡°We believe this system will alleviate the burden on low- and middle-income working-age individuals, thereby increasing their take-home pay, while also mitigating work disincentives ¡ª such as those caused by annual income thresholds ¡ª thereby addressing the urgent need to encourage workforce participation,¡± Takaichi said Thursday evening.
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