Amid rising concerns over the nation’s economic prospects, trade chief Shinji Sato renewed calls Sept. 2 for a significant reduction in corporate taxes to stir up business sentiment and ensure domestic demand-led growth.
Sato warned that doing otherwise would endanger economic structural reforms and prevent Japan from keeping its trade pledges. “Until now, we’ve been saying that weak domestic demand is a temporary phenomenon in reaction to the consumption tax increase,” he said. “From this fall toward the end of the year, we will be facing a difficult question of how to explain the situation to our trade partners.”
Pointing to growing calls from the nation’s business community for a tax reduction, Sato said that now is the time for the government to take decisive action. “The issue has been pending for the past several years,” he said. “And if we fail to settle it again, I’m afraid it will hamper trust in the administration.”