The government on Monday commenced its final efforts to analyze the possible negative economic impact of the planned sales tax hike next April, seeking opinions from dozens of experts, some of whom have suggested the need for further stimulus steps.
A government panel led by economic ministers started a six-day hearing amid lingering concern that the consumption tax increase to secure funds for swelling social security costs could thwart Prime Minister Shinzo Abe’s efforts to overcome nearly two decades of deflation.
The panel will hear from 60 people from a variety of backgrounds, including heads of nonprofit groups, scholars and business leaders, to provide Abe with information to decide as early as next month whether to proceed with the tax hike to 8 percent from the current 5 percent.
“I will make a decision this fall once the panel reports and after looking at various economic indicators,” Abe told reporters while visiting Kuwait.
Abe has said he will examine Japan’s economic growth data for the April-June period, among other factors. Revised figures for second-quarter gross domestic product are due out on Sept. 9.
On Monday, the panel heard from seven people, including Kazumasa Iwata, a former deputy governor of the Bank of Japan, who proposed cutting corporate and individual income taxes to ease the potential pressure on domestic demand from the sales tax hike.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.