Nissan Motor Co. President Yoshikazu Hanawa greeted the government's latest pump-priming package Monday by saying he "expects much" from its implementation but opposes cutting the consumption tax.
"The scale (of the package) is huge, and I think that much consideration has been given to the contents. I expect that it will have a great impact and help the economy recover," Hanawa said during a news conference.
But Hanawa said he is against lowering the 5 percent consumption tax, an option currently being discussed by the ruling Liberal Democratic Party and the Liberal Party. "The (current) rate (of the levy) is not very high compared with that of European countries and the U.S. ... I don't think it is a good policy, even as a pump-priming measure," Hanawa said, adding that in the long term, the government needs to shift its revenue base from direct taxes to indirect ones.
If the consumption tax is lowered, it would be difficult to raise it again, given the expected negative impact such a move would have and its politically sensitive nature, he said. Other alternatives should have a similar impact on boosting consumption, Hanawa said, calling for revision of the tax system and more tax incentives to reduce the burden on consumers who purchase a new vehicle.