The government should use any hike in the consumption tax to fund future social security needs, Finance Minister Sadakazu Tanigaki said Friday.
It is “desirable to place the consumption tax as a stable revenue source” and win public approval for using it to finance pension, medical and other social security costs that are expanding because of the rapidly aging population, Tanigaki said.
It was the first time he has proposed using the consumption tax to fund social security.
“With such a step, we can clearly show (to the public) that there will be no payouts without revenue sources,” he said. “We would like the public to feel at ease by demonstrating that the nation’s social security system is stable and sustainable.”
But the minister stopped short of specifying when and how the consumption tax, now at 5 percent, should be raised.
A growing number of ruling coalition lawmakers are opposing the Finance Ministry-led call for an early consumption tax hike because they have an eye on the House of Councilors election that will be held in July 2007.
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