Business / Economy

Abe to start hearing from experts in mid-November on tax hike

Kyodo

The Abe administration will call for opinions from experts on the economy in mid-November before deciding whether to raise the consumption tax rate to 10 percent in October 2015 as planned, Chief Cabinet Secretary Yoshihide Suga said Monday.

“We will start hearing from experts around the timing of the release of the July-September (gross domestic product) data,” Suga, the government’s top spokesman, said at a news conference.

The preliminary GDP data will be released Nov. 17.

Prime Minister Shinzo Abe also said in the Diet on Monday that he will begin discussions with experts “as soon as possible” and make a final judgment on the sales tax “by the end of this year” after analyzing the GDP data.

The administration formed a similar panel around one month before Abe formally announced in October last year that he was going ahead with raising the tax to 8 percent as scheduled last April 1.

That hike and the one under consideration for next October are aimed at covering swelling social security costs stemming from the graying population. The country’s fiscal health is the worst among major developed economies, with public debt equivalent to more than 200 percent of GDP.

The Abe team has made an international pledge to carry out the two consumption tax increases to promote fiscal rehabilitation, but some government officials and lawmakers have recently urged the prime minister to put off the second round, citing economic data showing the first has significantly stifled domestic demand.

Coronavirus banner