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▼ Govt Urged to Increase Consumption Tax to 14%
- Category:Event
TOKYO (Jiji Press) — The country’s business leader Yoshi-mitsu Kobayashi has urged the government to improve the nation’s primary budget balance “to zero by 2025,” when all baby boomers will be 75 or older, in order to ensure the sustainability of the social security system.
In an interview with Jiji Press and other media organizations on Thursday, Kobayashi, chairman of the Japan Association of Corporate Executives (Keizai Do-yukai), cited the need to raise the consumption tax further, saying that the tax rate should be around 14 percent in 2025, compared with the current level of 8 percent.
Fiscal consolidation centering on efforts to curb social security spending has its limits, he said, explaining the reason for the proposed tax hike.
The consumption tax rate should be “around 17 percent” in order for Japan to have primary budget surplus until 2045, which will mark the 100th anniversary of the end of World War II, Kobayashi said. The tax rate was raised to the current level from 5 percent in April 2014.
The primary budget balance refers to the gap between the country’s revenue, excluding from debt issuance, and expenditures other than debt-servicing costs.
The government, which has postponed the consumption tax rate hike to 10 percent until October 2019, is slated to work out a new fiscal consolidation plan as early as in June this year and include the program in its upcoming guidelines for economic and fiscal policy management.
Noting that the economic growth forecasts made by the government in the past were too optimistic, Kobayashi said, “I want the government to show figures that are slightly more realistic.”
In an interview with Jiji Press and other media organizations on Thursday, Kobayashi, chairman of the Japan Association of Corporate Executives (Keizai Do-yukai), cited the need to raise the consumption tax further, saying that the tax rate should be around 14 percent in 2025, compared with the current level of 8 percent.
Fiscal consolidation centering on efforts to curb social security spending has its limits, he said, explaining the reason for the proposed tax hike.
The consumption tax rate should be “around 17 percent” in order for Japan to have primary budget surplus until 2045, which will mark the 100th anniversary of the end of World War II, Kobayashi said. The tax rate was raised to the current level from 5 percent in April 2014.
The primary budget balance refers to the gap between the country’s revenue, excluding from debt issuance, and expenditures other than debt-servicing costs.
The government, which has postponed the consumption tax rate hike to 10 percent until October 2019, is slated to work out a new fiscal consolidation plan as early as in June this year and include the program in its upcoming guidelines for economic and fiscal policy management.
Noting that the economic growth forecasts made by the government in the past were too optimistic, Kobayashi said, “I want the government to show figures that are slightly more realistic.”
- April 28, 2018
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