Japan Press Weekly

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2016 January 20 - 26 [POLITICS]

Planned consumption tax hike will deliver heavier blow to people’s livelihoods

The additional tax burden that the planned consumption tax hike will impose on the general public will be nearly two times heavier than the government initially explained, Japanese Communist Party Vice Chair Koike Akira has revealed in Diet deliberations.

With the consumption tax rate scheduled to increase from the current 8% to 10% in April 2017, the government estimated the impact of the tax hike on household finances mainly based on the Internal Affairs Ministry’s Family Income and Expenditures Survey (FIES). However, grilled by Koike, Finance Minister Aso Taro in a Budget Committee meeting of the House of Councilors on January 18 admitted that the survey covers only around 60% of household consumption expenditures.

In the following day’s Budget Committee meeting, JCP Koike posed a question regarding the government estimate. Koike pointed out that Aso said to JCP lawmaker Miyamoto Toru the other day in the Diet that the consumption tax hike will cast an additional tax burden of 35,000 yen a year per household or 14,000 yen per capita. Stating that the government used data covering around 60% of household consumption expenses to calculate this estimate, Koike asked the finance minister what the estimated figures will be after taking into account this fact.

Aso replied that the amount of the additional tax burdens would be 62,000 yen per household or 27,000 yen per capita.

Koike said, “The new estimate is nearly two times larger than the previous one. It is impermissible for the government to have tried to make the possible negative impact of the tax hike look much smaller,” and demanded that the planned consumption tax increase be cancelled.