The government is ready to postpone a scheduled hike in the consumption tax if the move looks like it would weaken the economy and reduce total tax revenues, Chief Cabinet Secretary Yoshihide Suga told a regular news conference Friday.
The government has pledged to hike the unpopular tax to 10 percent from the current 8 percent in April next year unless the nation’s economy suffers a serious economic shock in the meantime, such as the body-blow suffered during the 2008 global financial crisis.
While Suga’s comment appeared to represent a significant backpedaling in the government’s resolve, he said its basic stance remains unchanged.
“I don’t think it’s possible the government will raise the tax rate if tax revenues are expected to be reduced,” Suga said.
The 2008 financial crisis caused a situation in which the government would find it impossible to raise the sales tax rate, he added.
Earlier in the day, Prime Minister Shinzo Abe reportedly told a Lower House session that he is planning to raise the sales tax as scheduled in April next year.
Abe also denied he would dissolve the Lower House after announcing a postponement of the tax hike, as he did in November 2014, which led to the landslide victory of the ruling Liberal Democratic Party and Komeito coalition. Speculation is now rife that Abe may try to repeat the maneuver.
“As of now I’m thinking to raise the tax exactly as planned. I’m not thinking of dissolving (the chamber) at all,” Abe said, in comments reported by Kyodo News.