Yuko Obuchi to Step Down as LDP Tax Panel Executive Over Food Tax Cut Plan

2026-06-25

To resign from tax panel executive post

Former Economy, Trade and Industry Minister Yuko Obuchi has told Takeshi Onodera, head of the Liberal Democratic Party's tax panel, that she intends to resign from her executive post, it was learned on the 25th. This is believed to be because she opposes the consumption tax cut now under discussion at the cross-party Social Security National Conference.

Obuchi plans to leave the informal gathering of tax panel executives known as the inner circle. Onodera told reporters at the party headquarters on the 25th that he has already tried to persuade her to stay. Asked why she was chosen as an executive, he said she was selected for her specialist knowledge in various fields and her track record.

Split over 1% food tax plan

At the inner circle meeting on the 17th, a proposal from the National Conference and working-level meeting chaired by Onodera was presented to keep the consumption tax on food at 1% for two years and direct the remaining equivalent of 1% to benefits, effectively making the food consumption tax zero. Obuchi opposed the plan, saying that the feelings of previous generations must be considered.

Obuchi has taken a cautious stance on tax cuts, in light of the history of successive administrations raising the consumption tax as a stable source of funding for the social security system. She has argued that the same amount of funding should be allocated to benefits, and has also expressed concern that a plan to restore the tax rate on food items to 8% after two years could be seen as a tax hike.

Obuchi, who is known within the party as a fiscal conservative, wrote in a book she published in December 2025 that public finances need discipline and restraint, and that there is a responsibility to leave fiscal room and options for children and grandchildren.

Party coordination on tax cuts stalls

Within the party, efforts to reach a consensus on a consumption tax cut have not progressed. The LDP discussed details of the 1% food tax plan at a party meeting on the 25th, but Onodera said afterward that the views received that day were varied, acknowledging that support and opposition are divided.

Prime Minister Sanae Takaichi is open to a tax cut. At a press conference on the 17th, she said she wanted to watch the adjustments based on the National Conference chair's proposal, and called for speed and sufficiency to be ensured. She is expected to decide by June whether to proceed with the 1% food tax plan, with an eye to submitting related legislation to an extraordinary Diet session in the autumn.

In its platform for the lower house election in February, the LDP said it would accelerate consideration of zeroing the consumption tax rate on food products. Its coalition agreement with Nippon Ishin no Kai in October 2025 also included a pledge to examine legislation with a view to excluding food and drink items from consumption tax for a limited period of two years.

Caution over the 1% food tax plan is prominent among opposition parties. Yuichiro Tamaki, leader of the Democratic Party for the People, wrote on X, formerly Twitter, on the 25th that the National Conference's interim report draft was 'terrible in content', noting that while it lists issues, it 'does not show any concrete solutions at all'. Aoi Furukawa, policy chief of Team Mirai, also said on the 24th inside the Diet that 'a consumption tax cut has major drawbacks' and instead called for the introduction of income-linked benefits.

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