Top business leader Fujio Mitarai is calling for doubling the consumption tax to at least 10 percent in the latter half of the next decade to meet ballooning social security costs.
“We need to have a double-digit tax rate by the latter half of the 2010s in order to secure stable financial resources for pensions, health care and nursing care,” the chairman of the Japan Business Federation (Nippon Keidanren) said in a recent interview with media organizations.
The consumption tax is currently 5 percent.
Mitarai will enter his last year as the head of Japan’s most influential business lobby after the federation’s annual general meeting Thursday.
Mitarai, who has repeatedly lobbied for fundamental reform of the taxation and social security systems, said the government should prepare for a tax hike by 2011, which would be in line with Prime Minister Taro Aso’s plan to raise taxes around that time if the economy shows signs it is recovering.
As for Japan’s outlook, Mitarai, who is also chairman of Canon Inc., said things are looking better because progress is being made in inventory adjustments.
“Exports are ceasing to decline and showing some signs of recovery,” he said.
If the additional stimulus steps now pending in the Diet are taken, the economy may hit bottom as early as the July-September quarter, Mitarai said.
As for Japan’s medium-term goal for reducing greenhouse gas emissions by 2020, Mitarai called for the government to explain the costs and burdens the public will have to shoulder to meet that goal.
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