• Kyodo


Japan’s additional consumption tax hike planned for next year is a hard decision for Prime Minister Shinzo Abe to make, given a slowdown in the nation’s economic recovery, one of his advisers said Wednesday.

Etsuro Honda, a special adviser on economic affairs, also indicated the government should consider delaying the tax hike by months or more than a year from the scheduled October 2015.

“I suspect it is difficult,” Honda, a professor at the University of Shizuoka, said in an interview with Kyodo News. “The second tax hike could greatly depress consumer sentiment.”

Japan raised the consumption tax rate to 8 percent from 5 percent in April as the first of two steps designated under a law. The second rise is to bring the rate to 10 percent. Abe plans to decide later this year on whether to go ahead with the hike after studying economic conditions.

Honda’s remarks come as the economy has suffered from the first hike, with its gross domestic product contracting sharply in the April to June period.

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