Japan Ruling Parties Approve Tax Reform Policies for 2014

Japan’s ruling parties on Thursday adopted tax reform policies for fiscal 2014, putting off a decision on when to lower the tax rate on daily necessities to cushion the impact of the sales tax hike to 10 percent the following fiscal year.

But Prime Minister Shinzo Abe’s Liberal Democratic Party and its coalition partner the New Komeito party agreed to increase taxes on company workers and car owners in an effort to restore Japan’s fiscal health, the worst among developed nations.

In contrast, the ruling camp decided to provide tax breaks for the corporate sector to strengthen the “Abenomics” policy mix, indicating the difficulty of achieving a balance between economic revitalization and fiscal consolidation.

Takeshi Noda, chief of the LDP’s tax panel, said at a press conference that the ruling bloc hammered out the tax reform plan with a determination to tackle the big challenge of beating nearly two decades of deflation.

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