February 4, 2025

Japanese Communist Party member of the House of Representatives Shiokawa Tetsuya on February 3 demanded that the government lower the consumption tax rate which is a heavy burden on the general public as the prices of all kinds of goods keep rising.

At a meeting of the Lower House Budget Committee, Shiokawa pointed out that the number of price increases this year could extend to 20,000 items, and that the ratio of the consumption tax to annual income is 8.3% for households with annual income of less than two million yen and 2.1% for households with annual income of more than 15 million yen.

He asked Prime Minister Ishiba Shigeru, “Are you aware of the fact that the consumption tax is regressive, placing a heavier burden on lower income earners?”

Ishiba admitted to the regressive nature of the tax. However, he added, “Then, where do you think the money could come from to make up for a loss in tax revenues after the consumption tax cut?”

Shiokawa said that the effective corporate tax rate fell to 29.74% in 2023 from 40.87% in 2003, and that the larger the corporation, the lower the corporate tax rate. On the other hand, he pointed out, the consumption tax rate rose to 10% from 5% during the same period of time.

He stated that a correction in this preferential tax treatment for large corporations will enable lowering the consumption tax rate back to 5%.