October 20, 2026

Japanese Communist Party lawmaker Yamazoe Taku on October 19 at a meeting of the Senate Budget Committee criticized the government for proposing a half-baked bill which limits the consumption tax cut to two years without confirmation that the cost of living will be stabilized.

Under the bill, the consumption tax rate will be lowered to 1% from the current 8% only on food and beverages (excluding restaurant meals and alcoholic drinks) for two years, and a subsidy program will be implemented to reduce workers’ financial burdens after the two-year tax cut ends.

Yamazoe asked Prime Minister Takaichi Sanae whether the tax rate would be restored to 8% no matter what the economy looks like at the end of the two-year period. In response, PM Takaichi said that the negative impact of the tax hike resulting from the end of the tax cut period “would be mitigated by the subsidy program”.

Yamazoe noted that the program is estimated to cover 30% of the working population, and said that after the tax cut ends, most people will be hit with a higher consumption tax rate. Furthermore, he said, there is no guarantee that inflation will be under control at that time. He stressed, “The government’s proposal to limit the tax reduction to two years without any supporting proof is ill-conceived.”

Asked by the JCP senator about the source of funding for the two-year tax cut measure, the prime minister cited increased tax revenues and a review of the use of funds and budget surplus, insisting that the government will clarify funding sources during the budget-drafting process. Yamazoe said, “Although tax revenue is rising due to high prices, not all of the increase will be used for the subsidy program and the tax cut. It is clear that the government has no plan in place regarding how to fund the tax cut measure.”

Yamazoe explained the JCP proposal calling for a uniform tax cut to 5% on all items and services and the abolition of the consumption tax invoice system. He pointed out that while the amount of internal reserves held by large corporations reached 600 trillion yen, their corporate tax burden ratio stands at 10.9%, only half that of small- and mid-sized enterprises thanks to R&D tax breaks and other preferential tax treatment provided to large corporations. Yamazoe urged the government to stop providing preferential treatment to large corporations and the ultrarich and shift to a fair taxation system.