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OECD chief sees Japan's zero consumption tax plan as costly

The Japan Times·No Author·20 days ago
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Mathias Cormann, secretary-general of the OECD, has expressed concern over the government's plan to temporarily lower the consumption tax on food items to zero, calling it not cost-effective. While acknowledging that "we fully understand the pressure that rising food prices place on households, particularly those with lower incomes," Cormann said in a written interview on Tuesday that "a zero rate on food is a blunt and costly response." Prime Minister Sanae Takaichi's administration plans to reduce the consumption tax on food items to zero for two years to cope with inflation. The OECD has previously proposed raising the consumption tax as a way for Japan to secure revenue without increasing public debt. Amid soaring crude oil prices due to the escalating situation surrounding Iran, prices for a wide range of daily necessities, including household goods and food, are rising.…

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