Prime Minister Shinzo Abe will call for opinions from about 50 experts on the economy and finance before deciding on whether to raise Japan’s sales tax in April as planned, officials said Thursday, amid fears that the policy could suppress the nation’s nascent economic recovery.
Abe instructed ministers concerned to set up a panel to hear from these experts and “intensely discuss” the possible impact on the economy of the tax hike, which some expect would help improve the country’s fiscal health, the worst among major developed economies, according to the officials.
After receiving a wide range of opinions, Abe is expected to make up his mind possibly in late September or early October, economic and fiscal policy minister Akira Amari told reporters.
The government plans to increase the tax rate to 8 percent from the current 5 percent in April and to 10 percent in October 2015 as legislated last year. The policy has been welcomed by international bodies as a step to help cover swelling welfare costs in Japan, where the population is aging.
The panel to consist of Amari, Finance Minister Taro Aso, Bank of Japan Governor Haruhiko Kuroda and corporate executives from another government panel on economic and fiscal policies is scheduled to meet several times later this month to hear from the experts.
While many government and private-sector officials say Japan should raise the tax as planned to maintain its credibility in the international community and financial markets, topics at the hearings will likely involve the options of freezing the tax hike plan to sustain economic growth and revising the legislation to slow the pace of tax rate increase.
The panel will end hearings in early September before reporting to Abe.
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