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By Takaya Yamaguchi and Yoshifumi Takemoto
TOKYO (Reuters) – Japan’s government plans to spend about $33 billion on benefits for low-income families and an income tax cut as part of a package of measures to cushion the blow to families from the growing burden of living. Three government officials told Reuters on Wednesday.
The spending, recently estimated at about 5 trillion yen ($33. 37 billion), will be accompanied by a one-time global income tax cut of 30,000 yen per user value and a residential tax cut of 10,000 yen, respectively, to be implemented in June. 2024, according to a bill. He showed the plan received through Reuters.
The spending plan, which will be officially unveiled through Prime Minister Fumio Kishida’s workplace on Nov. 2, also includes bills for low-income households, officials said, confirming a report by the Nikkei newspaper.
The main points of the tax cuts will be discussed through the ruling party’s influential fiscal panel by the end of the year, said the officials, who spoke on condition of anonymity because they had the right to speak publicly.
Chief Deputy Cabinet Secretary Hideki Murai told reporters he was aware of the prime minister’s statement in a televised appearance on Tuesday night that he was seeking pay rises to offset the value increases next year.
Tax revenues have risen this year and Murai said the prime minister was looking to find a way to give some of it back to the public and households.
“The prime minister will give formal and express orders at an assembly between government officials and the ruling bloc, which will be held as part of the ruling component’s debate on taxation,” Murai said.
Inflation, driven by emerging commodity costs, has remained above the central bank’s 2% target for more than a year, weighing on income and clouding the outlook for an economy slow to recover from the scars of COVID-19.
With wage increases proving too slow to compensate for emerging prices, Kishida announced a plan to ease the pain by returning to families some of the expected accumulation of tax revenue generated through strong economic growth.
Kishida is expected to discuss wage increases, among other topics, with auto industry officials on his stopover at the Japan Mobility Show on Thursday, Murai said.
($1 = 149. 8500 yen)
(Reporting by Takaya Yamaguchi and Yoshifumi Takemoto; writing by Leika Kihara and Tetsushi Kajimoto; editing by Shri Navaratnam and Sonali Paul)