Finance Minister Taro Aso suggested Tuesday that the government will not go ahead with the planned sales tax hike from the current 5 percent to 8 percent in April 2014 unless Japan’s economy is on a growth path.
Legislation enacted in August 2012 says the government will not raise the consumption tax rate “if the economy is not improving,” Aso said at a press conference.
“It’s too early to decide” whether to carry out the tax hike, Aso added, emphasizing Prime Minister Shinzo Abe’s administration will make a final judgment while carefully assessing several economic data such as gross domestic product and wage growth.
The legislation stipulates as a nonbinding target for the sales tax hike that the government will seek to accomplish nominal economic growth of around 3 percent and real growth of about 2 percent.
Japan’s economy expanded at an annualized rate of 4.1 percent in the first three months of 2013 in inflation-adjusted terms, marking the second straight quarter of growth.
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