Even if the economy recovers, the primary budget balance will remain in deficit for the next decade unless the consumption tax is raised incrementally beginning in fiscal 2011, the government said in a report Friday.
If the 5 percent tax is doubled over five years between fiscal 2011 and 2015 by adding 1 point every year, a surplus will finally be achieved in fiscal 2018. If it is hiked by 7 points to 12 percent in the same manner, the surplus will be achieved slightly earlier in fiscal 2017, the government estimates.
The estimate indicates the government has effectively abandoned its goal of achieving a primary budget surplus in fiscal 2011 because no consensus has been reached on when and how much to raise taxes.