Japan’s Next Tax Hike Could be in Stages

Japan could soften the impact of a planned sales tax increase by raising it in stages rather than IN a single hike, an outside adviser to Prime Minister Shinzo Abe said on Wednesday.

Koichi Hamada, professor emeritus of economics at Yale University, also told Reuters that Abe should focus on structural reforms and slash corporate taxes deeper than currently planned to boost the economy and attract investment.

Abe raised the sales tax in April to 8 percent from 5 percent to curb Japan’s runaway government debt. The increase hit consumption, sending the economy into its worst fall in the second quarter since the 2011 earthquake and tsunami.

 
The premier is to decide around the end of the year whether to proceed with another planned hike, to 10 percent, in October 2015.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza