Japan Press Weekly

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2010 January 13 - 19 [POLITICS]

Key cabinet members in favor of consumption tax increase

National Strategy Minister Sengoku Yoshito was the first to publicly call for the tax to be raised.

In his lecture on January 6, Sengoku stated that the DPJ is called upon to publish, at any cost, a tax reform proposal, including the consumption tax, before the next House of Representatives general election. He was responding to Mitarai Fujio, Japan Business Federation president, who on January 5 urged the government to squarely tackle the tax reform issue and work to further deregulation.

On January 10, Sengoku said more discussions will be needed even before the House of Councilors election this coming summer.

Ishi Hiromitsu, former Government Tax Commission chair, wrote in the monthly Chuo Koron (December 2009) that government revenues can be secured only one time by means of cutting wasteful spending and banning bid-riggings. However, they can be sustained indefinitely by raising the consumption tax, a tax equally shared by everyone.

Ishi actually revealed that the budget slashing move was part of a campaign to convince the public of the need to accept a higher consumption tax rate.

It was last September that the DPJ in a policy agreement with the Social Democratic and People’s New parties promised that the coalition will refrain from raising the current consumption tax rate of 5 percent at least till the next general election. Sengoku’s statement goes completely against the coalition agreement.

Sengoku was followed by Kan Naoto, the Finance Minister presiding at the Government Tax Commission, who states on a TV program aired on January 10 that the government will spend the next year to work to completely review wasteful state finance. Arguments must be launched, even it were a consumption tax hike, so long as it is necessary for the state, he added.

The consumption tax issue has reached a critical stage.
- Akahata, January 15, 2010