Japan Ruling, Opposition Parties Agree to Scrap Provisional Gasoline Tax by Year-End

Japan's ruling Liberal Democratic Party (LDP), coalition partner Komeito, and multiple opposition parties have agreed to abolish the provisional add-on gasoline tax as early as possible this year, aiming to pass legislation during an extraordinary parliamentary session expected in autumn. The tax, which adds about 25 yen per liter on top of the base gasoline tax, was originally introduced to fund public works but faces opposition amid inflation concerns and recent election results that weakened the ruling coalition's majority in both houses. Opposition parties, including the Constitutional Democratic Party of Japan, plan to jointly submit a bill targeting a November 1 abolition date and are pushing for a swift enactment to reflect public sentiment expressed in the July 20 election. To address the anticipated revenue shortfall of around 1.5 trillion yen annually, ruling and opposition parties will establish a consultative forum to discuss alternative funding sources. Despite some reluctance from the LDP regarding the November timeline, talks will continue during a five-day parliamentary session starting Friday, with both sides emphasizing the need to respect the electorate's will and to collaborate on policy adjustments. This cross-party cooperation marks a significant political development following Prime Minister Shigeru Ishiba's electoral setback earlier in July.