Panel Support Contentious Tax Hike

September 2, 2013 Taxation in Japan

Akira AmariTOKYO – Plans to hike sales tax in Japan should go forward, but will need to be accompanied by extra public spending or tax cuts.

While talking to representatives of the national media on August 31st the Minister of Economics of Japan Akira Amari informed about the results of discussions held over the course of the week by a government appointed panel of 60 different economists, union representatives, and business leaders, on the topic of Japan’s upcoming hike to sales tax.

He specifically stated that the majority of the experts in the group have now voiced their explicit support for the measure.

During the discussions 46 of the panel members gave their full support to the tax, while 10 other members called for a delay to its implementation, and 3 insisted that the tax should be cancelled entirely, while 1 professed to having no stance on the implementation.

The group also stated that the tax hike should be offset by some economic stimulus measures, such as additional public spending, loosening of economic restrictions for businesses, or the implementation of new tax cuts.

The sales tax hike is a contentious and hotly debated issue in Japan, and according to recent media surveys approximately 80 percent of all people Japan would like to delay or cancel the measure.

The rate of sales tax in Japan is currently set to be hiked from 5 percent to 8 percent in April 2014, but the government reserves the right to delay or even cancel the measure if the measure is shown to be detrimental to the economy.

Photo by World Economic Forum