Japan Press Weekly

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2011 June 29 - July 5 TOP3 [POLITICS]

PM Kan OKs 10% consumption tax

The Democratic Party of Japan-led government on June 30 approved a plan regarding “an integrated reform in taxes and social services”, calling for doubling the consumption tax rate by mid-2010s.

It is the first time for the government to decide when and how much the consumption tax rate will be increased since the rate hike that was imposed from 3% to the current 5% in 1997.

Financial Policy Minister Yosano Kaoru at a news conference emphasized the government stance to raise the consumption tax rate in collaboration with the Liberal Democratic and Komei parties by stating, “A tax increase won’t be achieved by the ruling party’s own efforts.”

Asked by reporters about the government reform plan on the same day at a news conference, Japanese Communist Party Chair Shii Kazuo said, “It is outrageous to increase the consumption tax rate while calling for further cuts in social welfare programs, such as an increase in insured patients’ payment of medical costs, a rise in the eligible age for the start of pension benefits, and a reduction in welfare benefit payments.”

Shii also said that a consumption tax hike will “ruin people’s efforts to reconstruct the March 11 disaster-hit regions, deliver a devastating blow to the Japanese economy, and seriously deteriorate people’s living conditions.” He also expressed his determination to launch a grassroots-led movement to increase public opinion against the consumption tax hike.