The Cabinet on Friday made good on its vow and moved forward on doubling the consumption tax by 2015, but some experts and lawmakers already see it as only a tiny step in cutting the ever-expanding fiscal deficit.
"It is obvious that further tax hikes are required beyond 10 percent," said Kazuhiro Yoshii, managing director of the legal and tax research unit at Daiwa Institute of Research. "There is a bit of concern that they failed to clearly state (in Friday's bill) when they will work on" further tax increases, he added.
The bill approved Friday by the Cabinet for submission to the Diet aims to increase the 5 percent sales tax to 8 percent in 2014 and then to 10 percent in 2015. Raising the consumption tax by 1 percentage point would generate an estimated ¥2.5 trillion in additional income.