The Lower House Financial Affairs Committee on the 6th approved a consumption tax cut bill with the votes of the governing parties. The bill is expected to pass the full Lower House in the afternoon, again on the governing majority.
The government submitted the bill, and the Liberal Democratic Party and Nippon Ishin no Kai voted for it.
Under the bill, the consumption tax rate on food and drink would fall from the current 8% to 1% for two years from April 2027. The bill also creates an income-linked benefit for low- and middle-income workers, named the 就業者負担軽減支援金 (shūgyōsha futan keigen shienkin) — a support payment to ease the burden on earners.
That program would start in fiscal 2027 and 2028, funded by the revenue equivalent to one point of the consumption tax rate, and would be expanded in fiscal 2029 with a larger payment as it moves to full operation.
The bill does not say where the money to replace the lost tax revenue would come from beyond the one-point funding set aside for the benefit program, leaving the shortfall to be covered in later budgets.