Japanese government doubles estimated tax-hike burden, stokes opposition anger


Staff Writer

In a sudden shift, the government has nearly doubled its estimated per capita burden from next year’s consumption tax hike, drawing uproar and protest from opposition lawmakers at an Upper House Budget Committee meeting.

Previously, the government had estimated that every resident in Japan would need to pay ¥14,000 more per year after the consumption tax is hiked to 10 percent from the current 8 percent in April 2017.

During a budget committee session Tuesday, however, the government revised the estimate, nearly doubling it to ¥27,000 after Akira Koike of the Japanese Communist Party questioned apparent discrepancies in figures presented by Finance Minister Taro Aso.

“This is totally different from what was explained in the Lower House. In sum, (the per capita burden) is nearly twice as large,” Koike told a committee session Tuesday.

“That the government made the actual burden appear smaller is a very serious issue,” Koike said.

The government had based its earlier estimate on a monthly sampling questionnaire of household incomes and spending. Based on the figures from that survey, Prime Minister Shinzo Abe has claimed every consumer will save ¥4,800 a year after the planned introduction of a special tax rate of 8 percent for food and beverage products.

During Monday’s Upper House session, Koike pointed out that this figure does not correspond with a separate government estimate that the special rate would reduce government tax revenue by ¥1 trillion a year.

Japan’s population now stands at 126.82 million, meaning the total tax revenue will be reduced only by about ¥600 billion if every consumer pays ¥4,800 less thanks to the planned tax hike exemption.

The Finance Ministry has maintained that the ¥1 trillion estimate appears more plausible because it was calculated from the total actual sales tax revenue — the breakdown of which is not known — and the ratio of food and beverage expenses in an average household budget.

Facing an apparent contradiction between the two figures, the government stuck with the ¥1 trillion estimate during Tuesday’s session, leading the Finance Ministry to change its estimate method accordingly and boost the initial estimated per capita burden to ¥27,000.

“We have used the available statistics and tried to answer questions as best we could. But I believe we need to explain a little bit more carefully from now on,” Aso told Tuesday’s Budget Committee session.

Staff writer Tomohiro Osaki contributed to this report.

  • Paul Johnny Lynn

    It was obviously a “cultural misunderstanding” on the Communist Party’s part.