Japan to raise sales tax in 2014, launch $50 billion stimulus: reports
2013-09-13 16:50:30
Japan's prime minister has decided to hike the nation's sales tax next year, but will soften the blow with a $50 billion stimulus package aimed at protecting a budding economic recovery, reports said Thursday.
Shinzo Abe, who has spearheaded a drive to turn around years of tepid growth, will press on with a plan to lift taxes to 8.0 percent from the current 5.0 percent in April, Japanese media reported, a move seen as crucial to tackling a staggering national debt.
Parliament has already passed a law to hike the rate but Abe has yet to make a decision on whether to enact it amid concerns higher taxes will hit consumer demand and blunt a nascent recovery in the nation.
The reports from the Kyodo and Jiji Press news agencies Thursday did not make clear if another scheduled tax rise to 10 percent by late 2015 was still in the pipeline.
However, Abe will also launch a fresh economic package worth about 5 trillion yen ($50 billion) to cushion the increase, the news agencies and top-selling daily Yomiuri said.
Abe is expected to formally announce the plan on October 1 at the earliest, they said.
Broadcaster Asahi said the prime minister made his decision based on recent upbeat economic data and Tokyo's successful bid to host the 2020 Olympic Games, which is expected to boost growth.
However, the government disputed the reports, saying Abe had yet to make up his mind.