HAKODATE, Hokkaido – The head of the government’s key tax panel said Monday that even if the consumption tax is more than doubled in the future, as recommended by the panel, the rate for food should remain at 5 percent.
“Even if the consumption tax is raised to a double-digit figure, that for food should remain at 5 percent,” Hiromitsu Ishi, chairman of the Tax Commission, said at a meeting here.
The commission said in a report released in June that the consumption tax should be raised to a “double-digit figure” over the next 10 to 15 years to cover ballooning welfare expenses of Japan’s aging population.
The report said the government should consider introducing lower rates for food and other basic necessities if the consumption tax is to be raised; Ishi took it a step further in mentioning a specific figure.
He also said that because a consumption tax hike would impose a heavier burden on lower-income households than on higher-income households in relative terms, steps to raise taxes for higher-income households may be taken to narrow the difference.
That would include, for example, changes in the income tax and the inheritance tax, Ishi said.
Prime Minister Junichiro Koizumi has repeatedly said he will not raise the tax.