TOKYO - A bill to cut the consumption tax on food and beverages and introduce an income-linked cash benefit program was passed by Japan's House of Representatives on Friday, after being fast-tracked for debate in a plenary session.
The government's top priority in the extraordinary Diet session through Dec. 12, the bill was passed on the strength of the ruling coalition's lower house supermajority. Opposition parties spoke against its passage, raising prospects of a challenging path through the Senate, or the upper house, where the ruling coalition lacks a majority.
The bill would implement a two-year tax cut from 8 percent to 1 percent on food and beverages from April. It would also introduce an income-linked cash benefit system for lower earners, which would initially be funded with an amount equal to 1 percent of consumption tax revenue and fully rolled out in fiscal 2029.
Debate over the bill in the lower house ended with little clarity on how the government will make up for an expected loss of funding from tax revenues estimated to reach about 10 trillion yen ($63 billion) in two years, and uncertainty over the design of the cash benefits system.
The lower house Financial Affairs Committee's approval of the bill earlier Friday came after Prime Minister Sanae Takaichi appeared before it and suggested the ruling parties could incorporate some of opposition requests for the benefits program.
Opposition parties said they would allow discussions on the bill to continue in the upper house after hearing Takaichi's remarks.
