- Japan’s ruling Liberal Democratic Party (LDP) and ally Komeito agreed on income tax breaks to counter household price hikes.
- Prime Minister Fumio Kishida prioritized tax cuts over increased defense spending for fiscal year 2024.
- The income tax cuts will feature a cap on annual household income to address income disparity concerns.
- Plans to raise taxes for funding defense spending were postponed.
- Tax policies aim to incentivize private-sector-led growth by offering incentives to companies raising wages and supporting strategic domestic investments.