Tax Delay Leads to Downgrade for Japan
April 28, 2015 Taxation in Japan
TOKYO – By delaying the upcoming hike to the rate of sales tax, Japan has garnered a downgrade to its credit rating.
On April 27th the international ratings agency Fitch Ratings downgraded the ratings of the sovereign debt of Japan, due to the country’s inaction to finding sources of revenues to compensate for the delay in the implementation of the country’s controversial hike to sales taxes.
Japan was scheduled to raise the rate of sales tax from 8 percent to 10 percent in April 2017, following an increase of 3 percent in April 2014.
According to Fitch Ratings the government of Japan has not done to account for the loss in revenues which will arise due to the delay in the implementation the raised tax rate.
It was also noted that last year the rate of corporate income tax in Japan was also decreased, with a further cut scheduled to occur in the near future.
Photo By: Gilgongo