THE ASAHI SHIMBUN
October 28, 2023 at 18:16 JST
Prime Minister Fumio Kishida responds to a question at the Lower House Budget Committee session on Oct. 27. (Koichi Ueda)
Prime Minister Fumio Kishida categorically ruled out raising taxes next year to pay for a massive increase in defense spending, alluding to unfavorable economic conditions that have left many households struggling.
Kishida was questioned in the Oct. 27 Lower House Budget Committee by the policy chiefs of the ruling Liberal Democratic Party and junior coalition partner Komeito about the planned income tax cut to be implemented next year.
Koichi Hagiuda, the LDP policy chief, said, “It will be difficult to understand the rationale for a tax cut when the government is also weighing a tax hike for defense spending.”
Yosuke Takagi, the Komeito policy chief, followed Hagiuda and pointed out that the proposed income tax cut contradicted the need for a defense spending tax hike.
Kishida responded: “The timing to implement (the defense spending tax hike) will be decided based on general economic and wage increase trends. Because fiscal 2024 will not provide the environment for such a tax hike, it will not be implemented at the same time as the income tax cut.”
When the Kishida Cabinet decided in December 2022 to implement increases in personal income tax, corporate tax and cigarette tax to pay for the defense buildup, the start was left vague with wording about “an appropriate time after 2024.”
And while Kishida ruled out a defense spending tax hike next year, he did not indicate when such an eventuality would begin.
In December 2022, Kishida said a decision on when to start the defense spending tax hike would be made in 2023. But with just two months remaining in the year, that prospect is also becoming increasingly unlikely.
Under the five-year plan, Japan plans to spend 43 trillion yen ($287 billion) through 2027, making it the world’s third-biggest spender on defense after the United States and China.
(This article was written by Sachiko Miwa and Naoki Matsuyama.)
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