The government must raise the consumption tax rate to 12 percent if it is to achieve a newly proposed fiscal discipline target, an official estimate showed Tuesday.
The government proposed the new target at a meeting of the Council on Economic and Fiscal Policy, a key economic policy panel. The target is less ambitious than earlier ones as a result of swelling public spending to cover social security costs and pay for stimulus packages to fight the recession.
The new target aims to achieve a surplus in the primary balance at both the national and local levels by the end of fiscal 2019, according to a released draft of the government's annual fiscal policy guidelines due out later this month.