Monday, July 22

Japan PM Abe says no compelling reason to raise sales tax beyond 10% for decade

Japanese Prime Minister Shinzo Abe said on Wednesday that he was not considering raising the sales tax beyond 10% under his administration, and that he saw no such requirement for at least a decade.

The premier has more than once promised to raise the sales tax to 10% this October as arranged, excepting a major economic shock on the scale of the breakdown of Lehman Brothers.

The Organization for Economic Cooperation and Development (OECD) not long ago recommended Japan’s sales tax expected to ascend to as much as 26% to pay for bulging social security costs to support the fast-greying population.

Policymakers have avoided discussing further tax increments in spite of the industrial world’s heaviest public debt burden at twice the size of its $5 trillion economy.

Abe has twice delayed the planned tax hike since the last increase to 8% from 5% in April 2014 dealt a blow to consumers and triggered a deep economic slump. Growing pressure on the export-reliant economy this year has fueled speculation he may postpone it again.

“I’m not at all thinking about raising the sales tax any more under the Abe administration,” he told a debate with other political party leaders ahead of the upper house elections set for later this month.

“I don’t think it will be necessary for 10 years,” he said, when asked about the possibility of a further hike beyond the one scheduled for October.

Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No A News Week journalist was involved in the writing and production of this article.