Japan’s Prime Minister Kishida plans an income tax cut for households and corporate tax breaks

Japan's Prime Minister Fumio Kishida said he is preparing to take bold economic measures, including an income tax cut for households hit by inflation and tax breaks for companies to promote investment, in what’s seen as a move to lift his dwindling public support. In his speech to start a new Parliamentary session, Kishida said it was time to shift from an economy of low cost, low wages, and cost-cutting to one backed by growth led by sustainable wage hikes and active investment. “I'm determined to take unprecedentedly bold measures,” Kishida said, pledging an intensive effort to achieve stronger supply capability in about three years. “I will put more emphasis on the economy than on anything else.”  He said he is determined to help people ride out the impact of soaring prices for food, utilities, and other costs that have exceeded their salary increases, by implementing income tax cuts. He also pledged to introduce corporate tax incentives to promote wage increases, investment, and optimization. Previously, Kishida had been considered reluctant to cut taxes because his government must find the funds to double Japan's defense budget within five years as planned while also trying to counter the impact of Japan’s low birth rate and rapidly declining population. Kishida’s pledge on tax breaks has been criticized by opposition leaders as a vote-buying attempt because the proposals surfaced just before two by-elections that were seen as a litmus test for potential snap elections. His Liberal Democratic Party secured a parliamentary seat representing Nagasaki but lost in a combined district in Kochi and Tokushima to a candidate backed by the main opposition Constitutional Democratic Party of Japan. “The results clearly show that many voters are dissatisfied by the government's delayed economic measures to tackle rising prices,” said Jun Azumi, a senior CDPJ lawmaker. Kishida told reporters that he takes the results seriously and that he will tackle important policies one by one. “Now is the time for me to focus on that, and I'm not thinking about anything else,” Kishida said, denying that his tax cut proposal was related to elections. This article was provided by The Associated Press.