Prime Minister Shinzo Abe will call for opinions from about 50 experts on the economy and finance before deciding on whether to go ahead with raising the consumption tax in April as planned, officials said Thursday, amid fears that the policy could retard the nascent economic recovery.
Abe instructed his economic ministers to set up a panel to hear from these experts and “discuss intensely” the possible impact on the economy, the officials said.
After receiving a wide range of opinions, Abe is expected to make up his mind around late September or early October, economic and fiscal policy minister Akira Amari said.
The government plans to increase the tax rate to 8 percent from the current 5 percent in April and to 10 percent in October 2015 as legislated last year. The policy has been welcomed by international bodies as a step to help cover welfare costs.
The panel will consist of Amari, Finance Minister Taro Aso, Bank of Japan Gov. Haruhiko Kuroda and corporate executives from another government panel on economic and fiscal policies. It is scheduled to meet several times this month to hear from the experts. The panel will end hearings in early September before reporting to Abe.
While many government officials and private-sector analysts say the tax should be raised as planned to maintain Japan’s credibility in the international community and financial markets, topics at the hearings will likely involve the options of holding off in order to sustain growth and revising the legislation to slow the pace of the increases.
Concerns are spreading within the administration that the tax increase could weigh on business and household spending.
The panel will call for opinions from economists, business lobbies and labor unions. It will also hear from some who are negative about the plan for a tax increase in April, including Koichi Hamada, a professor emeritus of economics at Yale University and special adviser to Abe.