Suga points to a new tax hike in Japan in the future
Tokyo, Sep 11 (efe-epa).- Japan’s likely new Prime Minister Yoshihide Suga, said Friday that a new tax increase in the country to clean up the national economy is needed, although he ruled out that this measure would be applied in the short term.
Suga, who is expected to be elected as the new prime minister of Japan next week said Japan “will have no choice but to raise the consumption tax” in the near future, during an interview with a Japanese network broadcast the day before.
When asked Friday about those statements, Suga said he was referring to a tax increase that would be applied “later” and always based on the economic policies of Japanese Prime Minister Shinzo Abe.
“Abe has said before that it was not necessary to raise the excise tax again for the next 10 years. I share the same idea,” Suga said at a press conference.
The government led by Abe has applied two increases in consumption tax (VAT) in recent years, the first from 5 percent to 8 percent in 2014, and the second, from 8 percent to 10 percent in October.
Both measures undermined Japanese household spending, which represents the main pillar of the world’s third-largest economy and whose weakness has been one of the biggest impediments to the full functioning of “Abenomics,” the economic reactivation program promoted by Abe.
Making the fiscal readjustment compatible with economic growth in the complex scenario posed by the pandemic will be one of the biggest challenges facing the successor to the head of Abe’s Japanese Executive, after the prime minister announced he would leave office for health reasons.
It is expected that on Monday the PLD will appoint Suga, current head of the Cabinet and spokesman minister, as the leader of that political group, and that on Wednesday he will be confirmed by the Diet as prime minister in an extraordinary session.
The Japanese media point out that Suga has so far preferred to keep his distance with supporters of increasing public spending and is more in favor of adjustment policies. This is key in a country whose public debt is expected to reach 259% of GDP by the end of this year, according to calculations by the US rating agency Fitch. EFE-EPA