LDP, DPFP to continue talks on income tax threshold
Japan's ruling Liberal Democratic Party and the opposition Democratic Party for the People agreed Friday to continue discussions on raising the minimum taxable annual income level from the current 1.6 million yen to 1.78 million yen.
The agreement was struck at a meeting between LDP tax panel chief Itsunori Onodera and his DPFP counterpart, Motohisa Furukawa.
The LDP is considering raising the threshold to 1.68 million yen in 2026. DPFP leader Yuichiro Tamaki has rejected the idea, saying that it is not enough.
"We still have to continue discussions on the size of the hike," Furukawa told reporters after the meeting.
Onodera stated, "We agree that we will make efforts to help people increase take-home pay without needing to curb working hours."
The minimum taxable income threshold represents the combined amount of basic deductions applied to all people with incomes, and employee income deductions, which salaried workers are eligible for.
The government and the ruling bloc of the LDP and the Japan Innovation Party, also known as Nippon Ishin no Kai, are considering introducing a mechanism to reduce the tax burden by reviewing the amount of deductions every two years according to the rate of increase in the consumer price index.
Some LDP members are calling for both the basic and salary deductions to be increased by 40,000 yen in 2026.
In December last year, the LDP, the DPFP and Komeito, the LDP's coalition partner at the time, agreed to aim for raising the minimum taxable annual income level to 1.78 million yen.
[Copyright The Jiji Press, Ltd.]
