Japan Press Weekly

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2020 March 11 - 17 [ECONOMY]

Koike on news show demands cuts in sales tax to 5% as anti-corona economic policy

Japanese Communist Party Secretariat Head Koike Akira on a prime-time BS news show aired on March 13 demanded that cuts be made in the consumption tax rate from the current 10% to 5% as a countermeasure against the financial crisis induced by the ongoing pandemic of COVID-19.

Koike said that Japan's GDP in the October-December quarter of last year shrank at a 7.1% annual rate, and that the jobs-to-seekers ratio in January of this year dropped. By citing these data, Koike pointed out that the Japanese economy has been faltering since the consumption tax hike in October of last year. Adding that the spread of the new virus is causing a global recession and a nosedive in stock prices, he said, "Without a stronger and more dynamic economic policy, Japan cannot overcome the crisis."

He continued to say, "In order to stop the chain reaction of bankruptcies and layoffs, it is essential for the central government to provide full-fledged support for small- and medium-sized enterprises," criticizing the Abe government for planning to inject only 1.6 trillion yen into financial assistance while having injected 20 trillion yen into financial assistance at the time of 2008 financial crisis.

Koike also said, "As the consumption tax puts a heavier financial burden on lower income earners, the reduction in the tax rate to 5% is vital to revitalize the household economy and increase domestic demand." Referring to the fact that even some ruling party members suggest that the tax be cut to the same degree, he said, "To get through the unprecedented depression, the government should boldly remit the consumption tax and social insurance premiums and should change the current economic policy relying on external demand to one expanding domestic demand and consumer spending."