Photo/Illutration Finance Minister Shunichi Suzuki responds to questions at a meeting of the Lower House Financial Affairs Committee on Nov. 8. (Takeshi Iwashita)

Although Prime Minister Fumio Kishida said Japan will return surplus tax revenues to the people, his plan to cut income taxes will require an additional issuance of government bonds, Finance Minister Shunichi Suzuki said.

“The increase in tax revenues (over the past two years) has already been spent on policy programs and the redemption of government bonds,” Suzuki said in the Diet. “If we are going to cut taxes, we must issue government bonds.”

He was responding to questions from Takeshi Shina, a member of the main opposition Constitutional Democratic Party of Japan, at a Lower House Financial Affairs Committee meeting on Nov. 8.

Given the 3.5 trillion yen ($23.2 billion) increase in income and resident tax revenues over the past two years, Kishida has repeatedly said the government will “directly return this increase to taxpayers in the form of ‘taxes’” in June next year.

It is part of a package of economic measures approved by the Cabinet to cushion the impact of rising prices.

But according to Suzuki, the tax cut plan will require adding to the government’s already enormous debt.

In his questioning, Shina criticized Kishida’s repeated emphasis on the tax cut plan by likening it to a household expense situation.

“Last year, my overtime pay increased, and I spent it on living expenses at that time,” the CDP lawmaker said. “Now, half a year later, it’s as if I’m saying, ‘Please increase my allowance and give it back to me because I earned more in overtime at that time.’”

Suzuki, however, responded, “The act of returning taxes should not be implemented from the viewpoint of the theory of financial resources but from the viewpoint of what kind of consideration we should give to the public who bear the burden of taxes.”

Shina countered by saying: “The term  ‘returning’ is being interpreted in a way that strays far from its everyday meaning. Normally, returning is only possible when there is a source of funds.”

Related News