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Ishiba Weighs New Economic Boost for Japan, Takes Sales Tax Cut Off the Table

18 July 2025
2 min to read
Japan’s PM Ishiba Considers Additional Economic Stimulus While Ruling Out Sales Tax Reduction

Prime Minister Shigeru Ishiba has expressed willingness to implement additional economic stimulus measures if necessary but has firmly rejected the possibility of reducing Japan's consumption tax, emphasizing fiscal responsibility amid ongoing economic challenges.

Japanese Prime Minister Shigeru Ishiba indicated on Friday that he remains open to implementing additional economic stimulus measures if required, but categorically dismissed proposals to cut the nation’s sales tax rate as Japan continues to navigate economic uncertainties.

Speaking at a parliamentary session, Ishiba emphasized his administration’s commitment to addressing economic challenges while maintaining fiscal responsibility.

No Reduction in Consumption Tax

Ishiba took a firm stance against the idea of reducing Japan’s consumption tax, which currently stands at 10%, despite calls from some quarters to provide relief to consumers facing inflation.

“I’m not considering cutting the consumption tax rate,” Ishiba stated clearly during the parliamentary proceedings.

The Prime Minister underscored that the tax revenue serves a crucial purpose in financing Japan’s social security system, which faces increasing pressure from the country’s rapidly aging population.

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Additional Economic Support Remains an Option

While ruling out tax cuts, Ishiba maintained that his government stands ready to implement further economic stimulus measures should the situation demand such action.

“If we need to take additional economic measures, I will respond without hesitation,” Ishiba declared, signaling the government’s readiness to act decisively if economic conditions deteriorate.

The Prime Minister’s comments come as Japan grapples with persistent inflation that has squeezed household budgets, prompting discussions about potential policy interventions to support economic growth and consumer welfare.

Balancing Economic Growth and Fiscal Health

Ishiba’s administration faces the complex challenge of stimulating economic growth while addressing Japan’s substantial public debt, which stands as one of the highest among advanced economies relative to GDP.

The Prime Minister has previously emphasized a focus on wage growth and economic revitalization as key priorities, aiming to create a virtuous cycle of increased earnings and consumer spending to drive sustainable economic expansion.

Financial markets and economic analysts will be closely monitoring the administration’s policy signals in the coming weeks, as decisions about potential stimulus measures could have significant implications for Japan’s economic trajectory and the government’s fiscal position.

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