Chikara Sakaguchi, deputy head of New Komeito, indicated Wednesday that the consumption tax might be raised, provided the revenue is dedicated to maintaining quality of social security services.

However, Sakaguchi did not elaborate on the timing of an increase from the current 5 percent levy. Keeping in mind the House of Councilors election scheduled for next summer, politicians in New Komeito and its ruling bloc leader, the Liberal Democratic Party, have been keeping mum on the specifics of tax hikes.

“A time will come in the future when we have to choose between allowing the level of social security services to decline and raising the tax,” said Sakaguchi, who previously served as minister of health, labor and welfare within the ruling coalition with the Liberal Democratic Party.

The comment was made in a policy discussion between Komeito and the Japan Business Federation (Nippon Keidanren), which called on the party to raise the consumption tax to fund social services.

Keidanren Chairman Fujio Mitarai said the economic reform initiative by the administration of Prime Minister Junichiro Koizumi has yet to be completed.

“We should achieve the two aims of putting a solid social safety net in place and ensuring vibrant economic growth,” Mitarai said.

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