Camouflaging Supporters

Two leading parties, Liberal Democratic Party and Komeito, seems to be split over newly proposed refunding system for consumption tax. While LDP lawmakers were overwhelmingly willing to introduce the system, Komeito was sharply opposing to the system requiring dismissal. As long as their process for approving new security legislature or other important issues, however, this noisy argument should be a ceremony they need to pass through to disguise their supporters.

Ministry of Finance submitted a draft of new tax refunding system to both leading parties earlier this month, which would be introduced with consumption tax hike in 2017. Although the ministry tried to camouflage the system as reduced tax rate, naming it Japanese Version of Reduced Tax System, it was nothing but a refunding system for consumers with flat tax rate of ten percent.

Lawmakers of Komeito, which upheld introducing reduced consumption tax rate mainly for daily goods and foods as campaign promise, were furious on the idea of refunding. In an inner meeting of the party on Friday, Komeito lawmakers accused their leadership, demanding dismissal against the plan. “Scrap is scrap, unable to be casted into iron. If the party leaders for tax policy cannot scrap the plan, they need to step down,” told one lawmaker in the meeting.

Supporters of Komeito are mainly the people with lower income. It is more than obvious that universal consumption tax hike will directly damage those people. While consumers have to lose their money until it will be refunded someday in the refund system, they do not have to pay for additional tax rate, for daily foods at least, in the reduced tax system. Komeito lawmakers are afraid of disappointment of their supporters on weakness of the party against bureaucrats.

But, some of party leaders were said to have been involved in the process of architecting that refunding system. Vice-president of Komeito, Kazuo Kitagawa, secretly accumulated meetings with LDP leaders and bureaucrats with MOF, kept on hearing the opinions of his colleague in the inner meeting. Since Komeito leaders have assessed the refunding system as the baseline acceptable for their supporters with low income, they cannot reject the proposal from MOF.

Kitagawa played a role to keep connection between those two parties in the discussion over new security legislation, which was sharply criticized as unconstitutional. It is likely that Komeito lawmakers will be persuaded with some nominal reasoning, as long as the party keeps the card of leaving coalition with LDP. For serious supporters of Komeito, internal quarrel between lawmakers may look like a soap opera.