A senior ruling Liberal Democratic Party lawmaker expressed conditional readiness Saturday to hike the consumption tax and introduce a "pro forma standard tax."
"We will have no choice but to raise the consumption tax a bit if the economy improves a notch down the track," LDP Acting Secretary General Nobutaka Machimura said in a lecture in the town of Higashiura, Aichi Prefecture.
"At this stage, it is impossible to raise the tax in view of the current state of the economy," he said, noting the government may introduce a pro forma standard tax in the not-so-distant future.
"We cannot help but consider introducing it," he said, "though I am not saying its introduction will be soon."
Under the pro forma standard, corporate tax is levied on the basis of such nonprofit norms as the number of employees, combined wages and size of capital. The method allows taxes to be collected from companies operating in the red.
Major industry bodies representing small and midsize firms have urged the government to not introduce it. They say it may damage those firms going through a crisis due to deflation and Japan's slumping economy.
But Machimura said, "A growing number of companies" appear to be manipulating their financial statements, booking mild pretax losses in order to dodge taxes.