Japan should not rule out imposing a lower rate of consumption tax on certain goods, the head of Komeito told party lawmakers Tuesday.
Komeito favors the system as a way to ease the burden on low-income earners when the tax rate is raised. Natsuo Yamaguchi, who heads the junior partner in the ruling coalition, said the proposal should be kept on the agenda.
The Finance Ministry has recently proposed a different system, refunding to consumers the equivalent of 2 percentage points of consumption tax on foods and drinks when the tax rate is raised to 10 percent from 8 percent in April 2017. Alcohol would be excluded from the rebate.
Yamaguchi said a majority of Japanese people support the reduced tax rate system favored by Komeito. The ministry’s proposal appears to be far from what they want, he said.
At the meeting, a Komeito member said the refund system would be less effective in easing the tax burden.
The refund system may not be ready in time for the tax increase, another party lawmaker said, expressing concerns about the complexity of the ministry’s proposal.
Meanwhile, Finance Minister Taro Aso said separately the ruling coalition can modify his ministry’s proposal.
The refund system was proposed as one among several idea for easing the burden of the tax hike, Aso said.