Photo/Illutration Prime Minister Fumio Kishida enters the prime minister’s office on Oct. 24. (Koichi Ueda)

The government plans to reduce 40,000 yen ($267) in income taxes per person around next summer as part of measures to cushion the impact of rising prices, sources said.

The tax break will apply to each dependent, meaning a total of 160,000 yen would be cut from the income tax of a taxpayer with three dependent family members.

The government also plans to provide about 70,000 yen per household in cash handouts for low-income households, such as those exempt from the income tax, the sources said.

The income tax break will be financed by the increased income tax revenues in fiscal 2021 and 2022.

In principle, the tax will be reduced in one go. If the amount of the income tax is small, the tax will be cut over several months, the sources said.

The ruling coalition parties will discuss the details at their tax system research commissions.

Prime Minister Fumio Kishida on Oct. 20 instructed senior coalition officials to consider tax measures, including an income tax cut, to return part of the increased tax revenues to the public.

He plans to include the tax cut in a comprehensive package of economic measures to be approved by his Cabinet on Nov. 2.

In March, the government allocated 1.2 trillion yen in subsidies that local governments could spend at their discretion as part of measures to combat rising prices.

Of those subsidies, 500 billion yen was provided to low-income households, such as those exempt from the income tax. Each household received about 30,000 yen.

Related News