経済｜消費税減税への海外の反応 / Economy | International Reactions to Consumption Tax Cut

Summary

As the 2026 House of Representatives election approaches, Japan’s major political parties are facing harsh criticism from foreign media regarding their pledges to reduce the consumption tax.

In particular, concerns have been raised that a consumption tax cut could worsen the nation’s finances, especially in light of rising social security costs. The “Truss Shock” in the UK, which resulted in a triple decline in government bonds, stocks, and currency, is being cited as an example of the potential impacts on Japan’s future economy.

Dialogue

This dialogue is fictional and based on the article.

Chako: Hey Log, what does the consumption tax cut mean? I heard it’s being criticized from abroad!
Log: A consumption tax cut means lowering taxes, but foreign media are pointing out that it could worsen the country’s finances. They’re particularly worried about what will happen to tax revenues as Japan’s social security costs continue to rise.
Chako: I see! What kind of impact could that have?
Log: For example, there’s a risk of government bonds and stocks losing value, similar to the “Truss Shock” in the UK.
Navi: In this way, while a consumption tax cut aims to support households in the short term, it could potentially undermine fiscal health in the long term. In other words, it’s crucial to maintain a balance in policy.

Admin’s Note

I believe that the criticism from abroad regarding the reduction of consumption tax provides a very important perspective when considering Japan’s fiscal situation. In particular, we need to think about the risks posed by a decrease in tax revenue, especially with the increase in social security costs. As mentioned in the article, careful policy-making is required to avoid a situation similar to the “Truss Shock” in the UK. Balancing support measures for households with fiscal soundness is a challenging task, but I look forward to seeing how the discussions will progress in the future.