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Suga seeks limited reduced levy plan’s debut when sales tax is hiked in 2017

JIJI

Chief Cabinet Secretary Yoshihide Suga said in a satellite television program Monday that Japan should introduce a reduced rate plan at the same time as the coming consumption tax hike in April 2017 from the current 8 percent to 10 percent.

After the program, Suga told reporters that confusion will arise unless a reduced tax rate plan is introduced when the tax rises.

The ruling Liberal Democratic Party and its coalition partner, Komeito, agreed in December that their coalition would aim to introduce the measure to cushion the impact of the tax hike when the tax rises to 10 percent, after obtaining acceptance from the public. They aimed for the introduction in fiscal 2017, but the exact timing was left vague.

Asked whether he assumes multiple tax rates with the rate left unchanged on daily necessities, Suga said that what he has in mind is the reduced tax rate the ruling parties have promised. He thus indicated that the government does not plan to adopt a tax refund scheme proposed by the Finance Ministry.

Suga’s remarks clarifying the timing of launching the measure, in line with Komeito’s stance, may affect discussions on the matter between the ruling parties.