Japan’s Ruling Party Seeking to Cut Taxes on Daily Necessities

Japan’s ruling parties will vow to reduce taxes on daily necessities “at a time when the (sales) tax rate is 10 percent” to end political discord over the issue, lawmakers said Wednesday.

The plan will be outlined in the tax reform outline for fiscal 2014, the lawmakers said, but it is unclear whether such a rate cut would be implemented immediately upon the consumption tax rise in October 2015 or at some stage after the hike.

Prime Minister Shinzo Abe’s Liberal Democratic Party remains reluctant to introduce the reduced tax rate, but the party decided to partly accept a proposal of its coalition partner the New Komeito Party that is eager to take more measures to prevent the tax hike from hurting households.

The two parties plan to discuss which items will be subject to the reduced tax rate and how the government will manage the tax system, aiming to include the conclusions in their tax reform outline for fiscal 2015 which will be crafted in late December next year.

The tax reform outline for the next fiscal year starting April 2014 is slated to be finalized Thursday, the lawmakers said.

via Mainichi

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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