The Liberal Democratic Party will consider specific measures to make the income tax threshold adjustable in accordance with consumer prices, the LDP tax leader has said.
"I think it's natural to establish a link with consumer prices, which reflect the prices of all kinds of goods," Itsunori Onodera, chair of the LDP's Tax System Research Commission, said in an interview with the media on Monday.
The threshold, above which the income tax is levied, is set at the combined level of the basic deduction and the salary income deduction. Onodera was referring to the basic deduction.
In December last year, the ruling LDP and its then coalition partner, Komeito, agreed with the opposition Democratic Party for the People to raise the threshold, aiming to attain the level of ¥1.78 million.
This year, the threshold was raised to ¥1.6 million from ¥1.03 million. The DPP still seeks to raise the level to ¥1.78 million, in line with last year's agreement, citing rises in minimum wages.
"We will continue to have serious discussions" on the matter, Onodera said.
He also referred to an expected tax revenue decrease of ¥1.5 trillion at the central and local governments due to the planned abolition of the provisional gasoline and diesel tax surcharges based on an agreement among six ruling and opposition parties.
To make up for the drop, special tax measures for corporations and taxes on wealthy people will be reviewed, Onodera said.
"We need to discuss the ideal form of our tax system from a perspective close to citizens, instead of presuming that tax increases are inevitable, no matter what policy judgment we will make," he said.
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