UPDATE 1-Japan PM Abe says no need to raise sales tax beyond 10% for decadeReuters | Tokyo | Updated: 03-07-2019 12:46 IST | Created: 03-07-2019 12:40 IST
Japanese Prime Minister Shinzo Abe said on Wednesday that he was not considering raising the sales tax beyond 10% under his administration and that he saw no such need for at least a decade. The premier has repeatedly pledged to raise the sales tax to 10% this October as planned, barring a big economic shock on the scale of the collapse of Lehman Brothers.
The Organization for Economic Cooperation and Development (OECD) earlier this year suggested Japan's sales tax needed to rise to as much as 26% to pay for bulging social security costs to support the fast-greying population. Policymakers have steered clear of debating further tax increases despite the industrial world's heaviest public debt burden at twice the size of its $5 trillion economy.
Abe has twice delayed the planned tax hike since the last increase to 8% from 5% in April 2014 dealt a blow to consumers and triggered a deep economic slump. Growing pressure on the export-reliant economy this year has fueled speculation he may postpone it again. "I'm not at all thinking about raising the sales tax any more under the Abe administration," he told a debate with other political party leaders ahead of the upper house elections set for later this month. "I don't think it will be necessary for 10 years," he said when asked about the possibility of a further hike beyond the one scheduled for October.