Kan gov’t agrees with IMF call to raise consumption tax to 22 %

Japan Press Weekly

Japan Press Service Co., Ltd. is the only news agency providing information of progressive, democratic movements in Japan

Kan gov’t agrees with IMF call to raise consumption tax to 22 %

Just after its defeat in the latest Upper House election due to its call to increase the consumption tax, Prime Minister Kan Naoto’s government again began an attempt to drum up support for a tax hike by citing an IMF report.

The International Monetary Fund on July 14 published its annual report on the Japanese economy to present the argument to incrementally raise the consumption tax to 22 percent starting in FY 2011 in a ten-year measure to restore Japan’s fiscal health.

The report is made to appear to be recommendations from the International Monetary Fund. However, who actually drew up this scenario, in fact, were Japanese pro-tax hike forces including the representative of the Finance Ministry.

The IMF issued the report after holding discussions with Japanese proponents of a higher consumption tax. The IMF review team studied Japan’s economic policy in Tokyo for ten days in May and held a meeting with Finance Minister Noda Yoshihiko (vice minister in May), Deputy Chief Cabinet Secretary Furukawa Motohisa, and Bank of Japan Governor Shirakawa Masaaki.

The IMF team also met with representatives from the private sector to ascertain the position of the Japanese financial community in regard to a consumption tax rate hike.

- Akahata, July 16, 2010