Mathias Cormann, secretary-general of the OECD, has expressed concern over the government’s plan to temporarily lower the consumption tax on food items to zero, calling it not cost-effective.<\/p>\n
While acknowledging that “we fully understand the pressure that rising food prices place on households, particularly those with lower incomes,” Cormann said in a written interview on Tuesday that “a zero rate on food is a blunt and costly response.”<\/p>\n
Prime Minister Sanae Takaichi’s administration plans to reduce the consumption tax on food items to zero for two years to cope with inflation.<\/p>\n
The OECD has previously proposed raising the consumption tax as a way for Japan to secure revenue without increasing public debt.<\/p>\n
Amid soaring crude oil prices due to the escalating situation surrounding Iran, prices for a wide range of daily necessities, including household goods and food, are rising.<\/p>\n
Referring to the zero consumption tax plan, Cormann, who was visiting Japan, said, “It erodes the revenue base Japan urgently needs, and it actually disproportionately benefits higher-income households who spend more in absolute terms.”<\/p>\n
“The better approach is well-targeted fiscal support to the households that actually need that support,” he said, adding, “That protects people effectively and at a lower overall cost to the budget, preserving fiscal sustainability.”<\/p>\n
Cormann also said that Japan’s consumption tax rate, which stands at 10%, is very low compared to the average of about 19% across OECD member countries, calling for “a gradual increase over time.”<\/p>\n
In response to soaring crude oil prices, the OECD is “stepping up work on energy security,” such as diversification and investment in clean and low-emission technologies.<\/p>\n
“Japan is a valued and active partner in that work,” Cormann said. “I look forward to discussing it further during this visit.”<\/p>\n","protected":false},"excerpt":{"rendered":"Mathias Cormann, secretary-general of the OECD, has expressed concern over the government’s plan to temporarily lower the consumption…\n","protected":false},"author":2,"featured_media":21443,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[5034,8,190,33,1549],"class_list":{"0":"post-21442","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-japan","8":"tag-consumption-tax","9":"tag-japan","10":"tag-japanese-economy","11":"tag-nihon","12":"tag-taxes"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/21442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/comments?post=21442"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/21442\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media\/21443"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media?parent=21442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/categories?post=21442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/tags?post=21442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}