The ruling coalition parties plan to make a final decision by yearend on whether to introduce reduced consumption tax rates on certain daily necessities. Differentiated rates on daily necessities are introduced widely in other industrialized countries and have been advocated in Japan as a way of easing the burden of a rising consumption tax rate on low-income people.
But lawmakers should also carefully consider the problems inherent in such a measure, and weigh the demerits against its effects as they listen to opinions from various sectors.
The Liberal Democratic Party is cautious about introducing lower rates on certain goods, but has agreed to include the measure in its tax reform outline for fiscal 2014 at the strong urging of its coalition partner New Komeito.