Japan is beginning to emerge from 15 years of economic stagnation but a tax rise aimed at controlling sky-high borrowing could spoil the party.
The government is planning to double consumption tax to 10% by 2015. Paid by consumers when they buy goods or services, the tax will be increased in two stages, rising first to 8% in April 2014.
The country’s leaders face a tough choice over how, or even whether, to implement the unpopular measure that could take a bite out of growth just as a bold economic stimulus plan appears to be bearing fruit.
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