Ruling Parties Begin Talks On Proposed Tax Cuts

Jiji Press reports that the respective tax panels of the two governing parties - PM Fumio Kishida's conservative Liberal Democratic Party (LDP) and its junior partner Komeito - have begun discussions on the tax cut proposals outlined by Kishida on 26 October. Jiji: The talks come as Kishida "...unveiled plans to reduce tax by 40,000 yen per person in June next year. [...]The tax reduction will require financial resources totaling some 3.5 trillion yen, equivalent to the tax revenue increase in the past two years."

• Kishida also announceda JPY70k cash benefit for low-income households. According to Yomiuri Shimbun this raises the total cost to the gov't to JPY5trn (USD33.4bn).
• The panels are set to decide on whether a cap will be placed on the tax cuts, which would exclude high-earners from the reduced levy. Once each party has made its decision the gov't is expected to present tax reform legislation to next year's ordinary session of the Diet. The funding for the tax cuts is set to be included in a 2023 supplementary budget to be submitted to the current extraordinary parliamentary session.
• The programme, which Kishida has painted as countering the impact of inflation on household finances, is seen by some as laying the groundwork for a general election campaign. Kishida faces a leadership contest in the LDP in 2024, and improving the party's position in a GE before then could bolster his chances of re-election.