Just a week after Prime Minister Shinzo Abe announced his intention to raise the 5 percent consumption tax to 8 percent next April, Finance Minister Taro Aso said he was upbeat about raising the levy further to 10 percent.
Aso told reporters Tuesday the government should decide by the end of December next year whether to raise the tax to 10 percent in October 2015, as required by a special tax reform law enacted last year.
“It’d be hard to compile the (fiscal 2015) budget unless we make the decision by around (the end of) December” because it affects government revenues, Aso told a news conference.
The tax reform law contains an article that allows the government to cancel the planned hike if economic conditions deteriorate considerably.
But during the news conference, Aso indicated he believes the tax should be raised, pointing out social security expenditures are rapidly growing as society ages.
Unlike Aso, senior aides to Abe at the prime minister’s office are more sensitive to voter reaction and cautious about consumption tax issues.
Later the same day, Chief Cabinet Secretary Yoshihide Suga told reporters nothing has been decided about whether and when to raise the sales levy again beyond next April.
“The prime minister has just made the decision to raise the consumption tax from 5 percent to 8 percent,” Suga told a news conference.
“We will just make an appropriate decision, based on the law,” he said.
The Liberal Democratic Party and New Komeito face many local-level elections in spring 2015 that could make it difficult for the ruling bloc to alienate voters before then.
When asked about the elections, Aso said, “I cannot make any comment on that” because the Diet enacted the tax law last year and decided on the timing of the planned tax hike.