Japan's ruling party and the opposition have agreed in principle to vote on a bill doubling the sales tax on June 26, media said, inching closer to the enactment of legislation aimed at curbing ballooning public debt.
In a breakthrough for a country long trapped in a cycle of revolving-door governments and policy gridlock, Prime Minister Yoshihiko Noda's Democratic Party last week clinched a deal with major opposition parties on a plan to raise the sales tax.
The planned voting in the lower chamber comes after the current parliament session, originally scheduled to close on June 21, was extended to Sept. 8 to ensure enough time to enact the sales tax and other legislation.
With the support of the two largest opposition parties, the tax bills will likely gain enough votes in the lower house and then in the opposition-controlled upper chamber, even if a group of Democrats who oppose the plan vote against them.
Moody's Investors Service welcomed the three-party agreement as a positive factor for Japan's sovereign debt rating as "it is one of the first serious efforts in many years" to address the bulging deficit.
But Noda still needs to convince some of his fellow Democrats. The party's power broker, Ichiro Ozawa, reiterated his opposition to the tax rise on June 21 and, up to 60 ruling party members of parliament close to Ozawa may vote against the bills.
That, however, would not prevent the passage of the bills since the Democratic Party, its junior partner and the two major opposition parties account for about 90 percent of the 480-member lower house.
Japan has been hit by a string of credit downgrades in the past two years largely because of its failure to make progress in tackling its debt that is twice the size of its $5 trillion economy.
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