The Japanese government is considering spending $33 billion and tax cuts to fight inflation
Three JPN government officials told Reuters they were considering spending about $33 billion on a package of subsidies to low-income families and income tax cuts to cushion the blow to households from rising living costs.
The current estimated expenditure is about 5 trillion yen ($33.37 billion), including a one-time one-time income tax cut of 30,000 yen per person and a residential tax cut of 10,000 yen, to be implemented in June 2024.
Details of the income tax increase will be discussed by the ruling party's tax committee before the end of the year.
Hideki Murai, Japan's deputy chief Cabinet secretary, said, We hope to achieve wage increases to offset the impact of price increases next year. Tax revenues have risen this year and the prime minister wants to find a way to return some of that to the public to support families."
"Prime Minister Fumio Kishida will give formal and specific instructions at tomorrow's meeting," he added.
Japan's inflation rate has been above the central bank's 2 per cent target for more than a year, driven by higher raw material costs, weighing on consumption and clouding prospects for an economic recovery from the wounds left by the pandemic. Wage growth is too slow to offset the impact of rising prices.
Mr. Murai also said Mr. Kishida would discuss wage increases and other issues with auto industry officials when he visits the Japan Mobility Show on Thursday.
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