Opinions of experts in panel divided on planned sales tax hike

Kyodo

Opinion is divided over whether Prime Minister Shinzo Abe should proceed with a sales tax hike next year as planned, a Kyodo News poll of a government panel of experts showed Wednesday.

Among 33 of the panel’s 60 members who responded, 19 support the tax increase, including those doing so with reservations, while two oppose the increase and three did not indicate a clear stance.

Nine think the government should delay the scheduled tax hike or review the margin of increase, reflecting concern that the currently planned increase may depress consumer and business spending, hampering Abe’s effort to lift Japan out of nearly two decades of deflation.

Assuming the tax hike is carried out, to avert a downturn in the world’s third-largest economy, 16 said the Abe administration should compile an extra budget for the current fiscal year through next March, and 12 said the corporate tax should be cut.

The expert government panel, which began hearings Monday, will listen to a total of 60 people from a variety of sectors. It will hold sessions every day through Saturday and report to Abe before he decides as soon as next month whether to raise the 5 percent sales tax to 8 percent next April.

Under legislation enacted last year, the sales tax is supposed to be raised in two steps — to 8 percent next April and to 10 percent in October 2015 — to raise money needed to cover swelling social security costs for Japan’s aging population.