Commission interim report calls for over 10% consumption tax rate

The government Tax Commission held a general meeting on November 27 and published an interim report calling for a consumption tax rate increase to more than ten percent. The report will be submitted to the prime minister in mid-December.

The report also called for deduction of the pensioners' income tax and a housing loan tax deduction.

Ishi Hiromitsu, Tax Commission chair, said that the government share of the National Pension premiums can only be increased to one-half from the present one-third by increasing the consumption tax rate to more than 10 percent. The consumption tax started at three percent and later was increased to the present five percent.

The Tax Commission also confirmed that the government fund for the National Pension system should depend mainly on an increase in the consumption tax rate, which was introduced ostensibly to "deal with a rapidly aging society."

But the report also extended assistance to major corporations and banks by proposing an end to additional taxes for corporate consolidated accounts and a tax cut for banks' disposal of bad loans. (end)