Japan's New 10% Consumption Tax

 

Consumption tax to be raised to about 10% by around the mid-2010s, says State Minister for Economic and Fiscal Policy Yosano

In connection with Prime Minister Aso's statement on a hike in the sales tax in three years' time, State Minister for Economic and Fiscal Policy Hajime Yosano during an NHK TV talk show on November 2 said, "State finances will go bust unless the consumption tax is raised in stages to 10% by around the mid-2010s." He thus indicated his perception that it is necessary to raise the consumption tax rate by more than 5% in stages in order to stably finance the social security system, once economic conditions improve.Concerning the flat-sum benefit payment system, a policy included in the package of additional economic pump-priming measures, Yosano said, "The government will pay benefits to all households that are entitled to livelihood support." He thus once again stressed his stance of looking into the policy with the possibility of exempting high income earners from the list of those who are eligible for such benefits.

However, since Yosano's plan will make paperwork complicated, New Komeito Secretary General Natsuo Yamaguchi took a cautious stance: "The government’s goal is to implement that policy within the current fiscal year. There must not be a delay."

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