Marking an end to marathon negotiations, the ruling Liberal Democratic Party and its junior ally, Komeito, finalized plans Saturday to apply a lower sales tax rate to all foods — except for meals served in restaurants — a measure that will cost the government ¥1 trillion every year in revenue.
However, leaders of the two parties failed to explain how they will make up the massive loss in tax revenue. The plan has been criticized by some as a sweetener for voters ahead of the Upper House elections scheduled for summer.
Facing reporters after the talks, the secretaries-general of the LDP and Komeito would only say their parties will secure stable sources of revenue to finance the measure by the end of fiscal 2016.