Photo/Illutration Prime Minister Shigeru Ishiba enters the prime minister’s office on May 14. (Takeshi Iwashita)

Leaders of the ruling Liberal Democratic Party decided against including a consumption tax cut as a campaign pledge for the Upper House election this summer, overriding calls from within the coalition.

Prime Minister Shigeru Ishiba and other party executives concluded that it is important to maintain the rates of the consumption tax as a stable source of revenue to finance growing social security expenditures, senior LDP sources said May 14.

Opposition parties are clamoring for a consumption tax cut ahead of the Upper House election as a way for the public to deal with rising prices.

But the LDP decided to emphasize its fiscal responsibility as the governing party, the sources said.

Ishiba, who is LDP president, Hiroshi Moriyama, the secretary-general, and other party officials have agreed that it will be necessary to implement economic measures to lessen the impact of the higher cost of living.

However, many said a consumption tax cut would have limited effects because it will take time to revise laws, modify related systems and inform the public of the changes.

In the LDP, Upper House members, as well as young and midranking lawmakers who advocate fiscal stimulus, have called for a consumption tax cut.

Junior coalition partner Komeito’s priority policies for the Upper House election include a “tax cut” to directly alleviate the severe burden on people’s lives.

Tetsuo Saito, chief representative of the party, said a tax cut that will “most effectively help drive consumer spending” is necessary, without mentioning the consumption tax.

The LDP is considering a package of economic measures centered on expanding support to low-income families and providing subsidies to ease the day-to-day burden, a party source said.

At a Lower House Budget Committee session on May 12, Ishiba said, “What is important is to offer solid support to people in need.”

Many LDP lawmakers fear the party will fight an uphill battle in the Upper House election if it rules out a consumption tax cut altogether while opposition parties promise to lower the tax rate for food, for example.

LDP officials may eventually choose to leave the possibility of a future tax cut open in discussions to develop specific campaign pledges, sources said.

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