Japan PM considers suspending 8% food sales tax in election pledge

TOKYO, Jan 15 — Prime Minister Sanae Takaichi is considering a pledge to suspend the 8% sales tax on food as part of her campaign for a snap election next month, according to a Mainichi newspaper report citing unnamed sources.

The government and Takaichi's Liberal Democratic Party will carefully assess the market impact before deciding on the plan.

Scrapping the levy would cut government revenue by an estimated 5 trillion yen (RM150 billion) annually.

Takaichi plans to dissolve parliament on Friday and call a snap election, seeking public backing for spending plans that have rattled financial markets.

She is considering holding the election on February 8, two LDP lawmakers told Reuters.

The LDP formed a coalition government in October with the right-leaning Japan Innovation Party, known as Ishin.

This paved the way for Takaichi to become Japan's first female prime minister.

The parties said they had agreed to consider legislation to exempt food and beverages from the consumption tax for two years.

A call to the Prime Minister's Office seeking comment went unanswered on Saturday.