Finance Minister Jun Azumi said he will decide on the timing and size of a proposed hike in the consumption tax hike rate by the end of the year.
In a Sept. 5 interview with The Asahi Shimbun and other media, Azumi said raising the consumption tax rate, now at 5 percent, is integral to government plans to reform tax rates and integrate social security pension programs.
As a first step, he said the changes will be spelled out in legislation by the year-end.
"The numbers will be specified (at that time) ," he added.
The blueprint for the reform unveiled at the end of June by the government and the ruling Democratic Party of Japan did not mention a detailed timetable for the tax hike due to strong opposition within the ruling party. It only called for gradually raising the consumption tax rate to 10 percent by the mid 2010s.
But Azumi stressed Japan urgently needs to fix its public finances now. He called it an issue that is "weighing heavily on" the nation.
He said he wanted to compile a bill for tax changes to take effect next fiscal year, along with a consumption tax rate hike, as his ministry formulates its main budget for fiscal 2012 toward the end of the year.
"We are determined to submit the bill to next year's regular Diet session," he said.
Asked about this fiscal year's third supplementary budget to fund rebuilding from the Great East Japan Earthquake in March and a bill for the proposed emergency tax increase to finance the spending, Azumi said he expects to reach agreement with the opposition parties by the end of September with an eye to submitting the bills to the Diet in mid-October or later that month.
Azumi is also trying to minimize the tax increase. He told his staff to find ways to ramp up the government's non-tax revenues by trillions of yen, through sales of government assets.
The income from asset sales was originally estimated at about 3 trillion yen.
A fixed-rate income tax increase is one idea for financing reconstruction measures that is gaining popularity within the government.
But Azumi said economic conditions and other factors need to be taken into account in determining specifics of the emergency tax hike, such as when it will be implemented and its duration. The decision will require "extreme political finesse," he said.
The administration of former Prime Minister Naoto Kan was considering a temporary tax hike that would be introduced next fiscal year and remain in place for five to 10 years.
But the Kan administration also indicated the possibility of delaying the introduction of the tax increase and extending the term for the measure to 15--20 years to reduce the psychological impact of the new burden on taxpayers.
- « Prev
- Next »