Key Facts
• July 4, 2025: Hiroshi Moriyama, ruling party official, announced intent to end temporary gasoline tax.
• Temporary tax adds approximately 25 yen per liter since its introduction in 1974.
• Tax abolition targeted for March 2026, pending December 2025 tax reform discussions.
• Opposition’s earlier proposal to abolish the tax failed in the upper house.
• Tax reform aims to address rising fuel costs and household financial burdens.
• Concerns remain over compensating for reduced tax revenue and local government funding.
• Discussions within the ruling party and government tax council to intensify by year-end.
Summary
Hiroshi Moriyama, a senior official of Japan’s ruling party, announced plans to abolish the temporary gasoline tax by March 2026. This tax, introduced in 1974 during the oil crisis, adds 25 yen per liter and has long been criticized as a “temporary” measure in name only. The decision, aimed at alleviating household financial burdens amid rising fuel costs, will be finalized during December 2025 tax reform discussions. While the move is welcomed by consumers, challenges remain in addressing the resulting tax revenue shortfall and its impact on local government finances. The ruling party and government tax council are expected to engage in detailed discussions leading up to the year-end.
