Prime Minister hints at consumption tax increase after election

   Prime Minister Abe Shinzo on a TV program aired on July 5 hinted at the possibility of raising the consumption tax rate after the House of Councilors election.

   Abe said, “We will carry out a drastic tax reform in autumn. I’ve never said before that I won’t raise the consumption tax rate.” However, he stopped short of specifying how much he wants to raise the rate of the consumption tax.

   Commenting on Abe’s remark, Japanese Communist Party Chair Shii Kazuo on the following day said, “It is very serious that the prime minister admitted that he may exercise the option to raise the consumption tax rate. The JCP is firmly opposed to an increase in the regressive consumption tax. However, the question here is that if the government has a plan to raise the consumption tax rate, it must make it clear now so that the voters may voice their opinion on the government policy in the House of Councilors election.”

   Prime Minister Abe uses the need to secure the pension funds as the pretext for an increase in the consumption tax rate. Shii refuted Abe’s claims, saying, “The government abolished fixed-rate tax cuts and is imposing heavier taxes on the elderly under the pretext of building pension funds. With these measures, the national tax was increased by 2.8 trillion yen, but the state contribution to the basic pension program increased only 500 billion yen. The government is diverting the increased tax revenues to reducing corporate taxes.”

   Pointing out that when the consumption tax was introduced and when its rate was raised, the public has always been deprived of a chance to express beforehand its judgment on this tax, Shii stressed that this tactic must not be allowed.                                       - Akahata, July 7, 2007