Japan could soften the impact of a planned sales tax increase by raising it in stages rather than IN a single hike, an outside adviser to Prime Minister Shinzo Abe said on Wednesday.
Koichi Hamada, professor emeritus of economics at Yale University, also told Reuters that Abe should focus on structural reforms and slash corporate taxes deeper than currently planned to boost the economy and attract investment.
Abe raised the sales tax in April to 8 percent from 5 percent to curb Japan’s runaway government debt. The increase hit consumption, sending the economy into its worst fall in the second quarter since the 2011 earthquake and tsunami.
The premier is to decide around the end of the year whether to proceed with another planned hike, to 10 percent, in October 2015.