It is difficult to decide by year-end the timing of tax hikes for a planned defense spending boost such that the taxes could be raised from 2025, the ruling Liberal Democratic Party's tax head said Monday.
"We have no choice but to decide (the timing) next year and secure more than ¥1 trillion in 2026 and 2027," to help cover the higher defense expenditures, Yoichi Miyazawa, who chairs the LDP's Research Commission on the Tax System, told reporters after an informal commission meeting.
"In the current political situation, it is difficult to decide it this year," he also said. "If we don't decide this year, it would be difficult to start raising the taxes in 2025."
The decision will be delayed into 2024 amid an unfolding fundraising scandal involving many LDP factions and senior lawmakers.
Miyazawa met with Prime Minister Fumio Kishida on Sunday. They are believed to have discussed key issues on fiscal 2024 tax system reform, including the tax hikes to fund the higher defense spending.
The government plans to secure over ¥1 trillion ($6.84 billion) in fresh defense outlays by raising corporate, tobacco and income taxes in stages, but it has yet to decide when to start increasing the taxes.
The LDP-led ruling bloc is unlikely to say when to implement the tax increases in its fiscal 2024 tax system reform proposal to be adopted Thursday.