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By Leika Kihara<\/p>\n
TOKYO, Jan 19 (Reuters) – Japan’s expected snap general election is increasingly likely to lead to a cut in the \u200bconsumption tax rate, as ruling and opposition party executives on \u200cSunday stressed the need to do so to cushion the hit to households from \u200crising living costs.<\/p>\n
Japan levies an 8% consumption tax for food and a 10% rate on other goods and services, which is a key source of funding for rising social welfare costs in a rapidly ageing population.<\/p>\n
Shunichi Suzuki, \u2060secretary-general of the ruling Liberal \u200cDemocratic Party (LDP), pointed to the party’s earlier agreement with its coalition partner, Ishin, to aim at scrapping the \u200d8% levy on food sales for two years.<\/p>\n
“It’s our basic stance to sincerely achieve what’s written in the agreement,” he told a television programme on Sunday.<\/p>\n
The Mainichi \u200bnewspaper reported on Saturday that Prime Minister Sanae Takaichi, upon calling \u200ca general election next month, may pledge to temporarily scrap the 8% levy on food sales.<\/p>\n
The main opposition Constitutional Democratic Party of Japan (CDP), which agreed to form a new political party with Komeito, will also call for a temporary cut to the tax rate, CDP Secretary-General Jun Azumi \u2060told the same programme.<\/p>\n
Takaichi is likely to \u200bhold a news conference later on Monday \u200bto announce her intention to dissolve parliament and call a snap election in February, capitalising on her administration’s strong approval \u200dratings.<\/p>\n
A cut in \u2060the 8% food sales levy would reduce government revenue by an estimated 5 trillion yen ($31.71 billion) a year, according to government data, \u2060straining Japan’s already tattered finances and heightening the risk of a bond sell-off as \u200cinvestors focus on Takaichi’s expansionary fiscal policy.<\/p>\n
($1 = 157.6900 yen)<\/p>\n
(Reporting by \u200cLeika Kihara; Editing by Paul Simao)<\/p>\n<\/div>\n