Japanese Prime Minister Fumio Kishida is set to pledge to consider returning a portion of tax revenues to the public to mitigate the impact of price hikes in his upcoming speech to the Diet, government sources said Tuesday.
In his policy speech Monday at an extraordinary Diet session, Kishida is expected to say he will instruct his ruling Liberal Democratic Party and its junior coalition partner Komeito to work on shaping the details of the plan, the sources added.
With Japan taking in record revenue for fiscal 2022 through March, calls have been growing for the government to give part of it back to taxpayers who have been suffering the adverse effects of recent cost-push inflation.
Japan's tax revenue reached 71.14 trillion yen ($475 billion) for the fiscal year, hitting a record high for the third consecutive year, according to the Finance Ministry.
In response to surging energy prices following Russia's invasion of Ukraine in February 2022, Kishida is certain to promise to extend subsidies for gasoline, electricity and city gas, supposed to expire at the end of this year, until the spring.
Facing public frustration over living costs that have risen more than wages, Kishida could say he will "take a leading role" or even put his job "on the line" to address the country's economic challenges, one of the sources said.
Kishida has expressed eagerness to put together a new economic package by the end of this month and submit a supplementary budget for fiscal 2023 to fund it during the extraordinary parliamentary session slated to be held from Friday through Dec. 13.
Among the stimulus steps that Kishida's government is expected to carry out are tax breaks for companies intending to increase salaries for their employees and subsidies for investment in labor-saving efforts by smaller firms, the sources said.
With regard to a decision already made by the Kishida government to raise taxes to cover a planned rise in defense spending, the premier will stop short of specifying when the tax increases will commence, they added.
The LDP had previously suggested that Kishida should make his policy speech on the first day of the Diet session in accordance with custom, but the opposition bloc opposed the plan, saying he could use it to make a pitch to voters ahead of national by-elections on Sunday.
