Japan's cabinet on Friday approved a plan to double sales taxes as part of the government's move to rein in public debt as the rapidly ageing nation faces rising social welfare costs. If agreed by parliament, the package of reforms will see consumption tax rise to 8.0 percent in April 2014 and to 10 percent in October 2015 from the current 5.0 percent.
Finance Minister Jun Azumi told reporters that the government planned to submit related bills to parliament in March. But the legislation is expected to face a rocky road as opposition parties, as well as some lawmakers in the ruling Democratic Party of Japan, are against it.
The opposition bloc controls the upper house of parliament. Prime Minister Yoshihiko Noda has warned the future of the world's third-largest economy depends on reversing the rising public debt, arguing Japan has "no time to spare" in reducing its fiscal burden. In an online message after the decision Friday, Noda noted Japan's social security costs would increase by one trillion yen ($12.6 billion) every year as the population gets older. "If you pile up one trillion yen in 10,000-yen bills, it reaches the height of 10,000 metres, which is taller than Mount Everest," he said. Arguing Japan can no longer depend on borrowing, he sought understanding from the working, young generation.
Comments
Comments are closed for this article.