Japan's Noda vows to press ahead with tax rise

NEW DELHI: Japanese Prime Minister Yoshihiko Noda vowed Wednesday to press ahead with a controversial sales tax rise after a slew of lawmakers said they would leave the ruling party in protest.

Nine members of the Democratic Party of Japan said earlier Wednesday they planned to quit the party in opposition to the government's plan to double the country's five percent sales consumption tax, Kyodo news reported.

Noda said he had been informed of the planned resignations but added he would go ahead with the tax rise that the Japanese government plans to use to fund mounting social welfare expenses and rein in the public debt.

"We cannot delay addressing these issues without endangering the future of the Japanese people," Noda told a news conference in New Delhi where he was on a 36-hour visit to boost bilateral relations between India and Japan.

"These tax revenues (raised through the sales tax rise) will be returned to the Japanese people in the form of pension and medical benefits. We have to raise taxes to maintain the social security system.

"We will not deviate," he said. "I shall proceed with the plan."

"I shall explain to the public what needs to be done."

Japan aims to raise the consumption tax to eight percent in October 2013 and to 10 percent in April 2015, local media has reported.

The move is contentious with some lawmakers saying Japan's disaster-hit economy would suffer if consumers were faced with sudden price rises.

Copyright AFP (Agence France-Presse), 2011