The Abe administration should put off the consumption tax hike scheduled for next year or raise the rate by 1 percentage point per year if the economy stalls, according to a special adviser to the prime minister.
In an attempt to shore up economic growth, the 35 percent effective corporate tax rate should be cut to around 25 percent, said Koichi Hamada, a Yale University professor emeritus of economics, said in a recent interview.
The remark by Shinzo Abe's key economic adviser comes on the heels of dismal gross domestic product data released Monday. The seasonally adjusted GDP in April-June shrank a real 7.1 percent from the previous quarter on an annualized basis, posting the steepest contraction since January-March 2009 shortly after the collapse of U.S. investment bank Lehman Brothers.