Chief Cabinet Secretary Yoshihide Suga, the top contender to succeed Prime Minister Shinzo Abe, has pointed to the need to raise the consumption tax from the current 10 percent in the future to maintain Japan’s fiscal health.
Appearing on a TV program on Thursday night, Suga said that “thinking ahead, we’ll have no choice but to raise the consumption tax by asking the people (for their understanding) and after undertaking stringent administrative reforms (to cut government spending).”
The comment, which came in the middle of campaigning to choose the ruling Liberal Democratic Party’s next leader following Abe’s announcement of his resignation for health reasons, may draw criticism from opposition parties and some within the LDP who are pushing to lower the tax as a way to underpin the economy during the coronavirus pandemic.
Asked about the comment in a news conference on Friday, Suga stressed he was referring to a scenario down the road when Japan’s graying population would necessitate raising the tax.
“Prime Minister Abe has in the past said that there will be no need for another (consumption) tax hike for 10 years. I’m of the same mind,” he said.
Abe raised the consumption tax twice — from 5 percent to 8 percent in April 2014 and to 10 percent last October in line with an agreement made under the previous Democratic Party of Japan administration.
Suga’s rivals in the LDP leadership election on Monday, former Foreign Minister Fumio Kishida and former Defense Minister Shigeru Ishiba, appeared on the same program but did not take a clear stance on the issue.
Finance Minister Taro Aso added to Suga’s view, saying at a news conference Friday that in the face of swelling social security costs, “there is no doubt that (raising) the consumption tax is one of our ways” of helping to finance the state budget.
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