The second round of special pump-priming income tax cuts for the current year may be implemented as early as August if related bills are enacted by the Diet by late May, members of the ruling Liberal Democratic Party’s tax panel said April 14.
The LDP’s Research Commission on the Tax System met to discuss details of the tax cuts Prime Minister Ryutaro Hashimoto outlined last week, which would return another 2 trillion yen to taxpayers this year.
These new reductions would augment 2 trillion yen in special income and resident tax cuts already in the process of being implemented and would similarly take the form of returning a set amount, rather than a set percentage, of taxes to taxpayers. “Although it would be easiest to implement the tax cuts when annual tax adjustments are made at the year’s end, we are currently leaning toward making the tax returns on a monthly basis to fulfill the prime minister’s desire to see the money take effect as swiftly as possible,” one panel official said.
Members of the research commission said that while nothing has yet been set, the cuts in national-level taxes could in theory come as early as August, as long as legal red tape is cleared by late May. While this would indicate that the tax cuts would not make their way into consumers’ pockets before the elections for the House of Councilors expected in July as many LDP lawmakers have stressed, few panel members saw this as a major sticking point.
They said they were less certain of the timetable for the cuts in local resident taxes, since this part of the first 2 trillion yen in tax cuts is to be returned in June and has not yet been implemented. Some LDP officials said they would like these cuts to take effect simultaneously with the additional reductions, if technically possible, but others said the timing would probably take longer.
Final decisions over the timing of the cuts are to come early next week, one official said.
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