Japan Press Weekly

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2007 November 14 - 20 [FINANCE]

Government fiscal panel proposes consumption tax hike

The Fiscal System Council, an advisory panel to the finance minister, has recommended an increase in the consumption tax to secure resources to finance social welfare programs. It is extremely unusual for a panel that considers state expenditures to make recommendations concerning the consumption tax, a specific item of revenue.

The panel on November 19 submitted to Finance Minister Nukaga Fukushiro its recommendations on the FY 2008 budget which called for a drastic reform of the tax system, including the consumption tax, in order to work towards sound finances. “The consumption tax is a highly important tax item to secure stable resources for increasing social welfare spending,” according to the panel.

It also proposed to further impose restraints on social welfare and education spending by reviewing remuneration for medical treatment and standards for livelihood protection as well as reducing the total number of public servants, including school teachers. - Akahata, November 20, 2007