politics

72% of Japanese firms want Abe to delay tax hike

23 Comments
By Tetsushi Kajimoto

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23 Comments
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Why always report from a micro or macro economic perspective? What firms think and what firms want and how it will affect economic growth. I'd like to know how the previous all-inclusive regressive consumption tax hike has impacted people from different segments or classes of society and what they think about the proposed further tax increase?

9 ( +10 / -1 )

But the IMF says the Japanese government must raise the tax to 10%... could the IMF possibly be wrong?

6 ( +8 / -2 )

The tax level in Japan is way to low in the UK the VAT is at 20% + other taxes especially on fuel, yes its going to be unpopular, but when is a tax ever popular? too many imported goods like fuel won't help the economy, may be closing up off shore banking loop holes or big companies pay there way rather than avoiding paying tax. this would raise the moral of the public,

-14 ( +3 / -17 )

“A tax hike must wait until prices and wages pick up to an extent that people can actually feel inflation, otherwise the economy could falter.”

Hands up who doesn't feel the inflation?

I'd like to know how the previous all-inclusive regressive consumption tax hike has impacted people from different segments or classes of society

One can't judge just the consumption tax level alone. We have to look at the total picture, inclusive of all taxes and social security programs that redistribute the taxes collected.

It's clear that if you want to help the lower income segment out, giving the rich a tax break on their consumption doesn't help to achieve that. But if you were to redistribute the taxes collected from the rich to the lower segment, how does that look to you? Rich get socked, lower segment gets assistance, and the tax system stays simple and efficient. There's no downside here so far as I can see.

But the IMF says the Japanese government must raise the tax to 10%... could the IMF possibly be wrong?

If Japan is serious about addressing it's mounting fiscal problems any time soon, then yes it must raise the tax rate as the IMF says (as well as reform social security and the economy), but these companies don't have that as their focus.

0 ( +1 / -1 )

And? Like he cares....

0 ( +2 / -2 )

Since when has he listened to anyone? He always does what he wants, and damn the rest of us

2 ( +3 / -1 )

Why should anyone give a flip what the IMF thinks or the taxes elsewhere?

4 ( +4 / -0 )

Transparency of the way money is spent would help both the voters and the political system be more accountable, not as it is a corrupt and secretive system. If we knew where the extra money was going then we could understand! Think that's the problem.

-1 ( +1 / -2 )

Life was SO much easier before the introduction of a consumption tax - those were the "good old days"...

6 ( +6 / -0 )

100% of shoppers want Abe to scrap the tax hike ALTOGETHER!

Tax the superrich on unearned income - stocks and shares, etc., instead.

3 ( +6 / -3 )

Our consumer boycott is working. Keep it up. To hell with the IMF. Agree with above. Tax the super rich.

3 ( +5 / -2 )

Let’s face it, majority of Japanese including us who are from other countries and working here are getting pinched more or less by 8% consumption tax, one way or another. But, the reality is, to put Japan’s fiscal house in order, there is not many feasible alternatives available. For example, cutting social security spending and increasing retiring age may help reduce crashing deficits to some extent if Japan govt can survive the uproar of elders who consist of 26% of Japan’s population and will grow rapidly in next decades so.

The bottom line: raising tax is a dirty job, yet someone has to do it for the sake of long-term financial freedom in Japan. As they say “You can run, but you can’t hide” Abe can surely delay the scheduled next installment of consumption tax, yet the consequence will not be pain-free ("good old days" have been alredy views in the rear mirror), I can tell you guys that.

-1 ( +2 / -3 )

How about trying to cut the massive government wastage of taxpayers money - and the infamous inefficiency that exists here - before even THINKING about hiking taxes on food, fuel etc? Is there any need, for example, for well-paid public-servants to be receiving annual bonuses from us taxpayers?

6 ( +6 / -0 )

There should be a luxury tax on items that are not classed as daily or normal necessities , lambos, holiday homes in izu, 500sl benz', Lexus, Ferraris, boats, alcohol, tobacco, designer clothes and bags, rolex watches, larger tax on share market profits, tax the rich harder, faster, stronger, give the little guy a break remove the tax on food and children's clothes, add a luxury tax on holiday travel to hawaiii Europe etc too.

Raise the consumption tax in 3 years time once the economy has recovered, it has to go up eventually 36 months isn't going to be the stick that breaks the camels back, if the economy is doing better it will eventually pay in more consumption tax anyway.

1 ( +2 / -1 )

But, the reality is, to put Japan’s fiscal house in order, there is not many feasible alternatives available.* for Japans debt to be reduced anytime within the next 100yrs the tax needs to be raised to 30+%. since that will never happen next thing will be to cut services pensions etc. to anybody whos hoping to retire on the J pension youll be in for a huge shock. if you arnt saving or have assets in other countries then the average J citizen will find it very tough. to all those J housewives you think staying at home is a better option, unless you husband makes over 10million yen a yr youd better get back to work and start saving for retirement.
1 ( +1 / -0 )

So if corporations don't want tax hike, then they must raise wages and spread the wealth. They can't have their cake and eat it too.

1 ( +1 / -0 )

He ought to or it will be more stagnation. I don't know what is going to get the economy going again.

0 ( +0 / -0 )

My feeling is is that if it's not put up in Oct 2015,when will it? Aside from Hashimoto in 1997 doing it, no subsequent PM has had the guts to do so.I don't count Abe cuz he inherited the plan.Koizumi with his insane popularity should have done it but he was too busy being a celebrity PM to do something of relevance. Unless Abe remains the PM,there's no way that anyone succeeding him would put it up.It's an election loser.So Abe needs to stand tall and persuade the populace that the short term pain is for a better and brighter long term Japan.

1 ( +1 / -0 )

Do not forget that while raising the consumption tax Abe lowered corporate taxes.

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following a run of soft economic indicators that highlighted a bigger-than-expected hit from April’s increase

It was only a bigger-than-expected hit to those who don't know what they are talking about and have no clue how the monetary / economic system works in reality. For those who do know how things work, what happened was exactly what they expected to happen. Unfortunately, the top level people at the Ministry of Finance who have been pushing for this economic vandalism and sabotage are firmly in the first group, and in any profession other than economics they would have been fired for their ignorance and incompetence long ago.

0 ( +1 / -1 )

Looks like most, with a few exceptions such as EthanWilber, are looking squarely at the short term.

It'll be interesting to see the response to the flash GDP number on Monday. I don't think it's going to be pointing at a technical recession myself.

If the economy isn't good enough now to continue with the much needed fiscal consolidation, exactly when will the economy be good enough?

BurakuminDes, sure there is waste in government spending, and I agree it should be cut, but can you quantify it? As compared with other countries, Japan isn't spending a lot relative to GDP, except when it comes to social security spending, which is increasing at 1 trillion a year as the population ages and shrinks. Japan has a budget deficit of some 40 odd trillion yen, and it seems, Abe has no plan to address it, only plans to get his party re-elected, and then he's going to postpone much need treatment for this country again as the opinion polls dictate it to him. Sadly, the problem is far far worse than just cutting government waste can resolve.

1 ( +1 / -0 )

brian wheway:

The tax level in Japan is way to low in the UK the VAT is at 20%

You should do some research. Try looking up UK VAT on wikipedia. It's only 20% for certain things, 5% for others and 0% for others, including meat and fruit and vegetables. And it's of no use to consumers how low taxes are if the basic prices are high. ie 20% of 1 pound (about 180 yen) is a lot less severe than 8% of 500 yen.

1 ( +1 / -0 )

Pukey2Nov. 15, 2014 - 08:01AM JST You should do some research. Try looking up UK VAT on wikipedia. It's only 20% for certain things.

The cost increase is a combination of things and it effects everybody. Problem for Japan is that consumers are paying 10 percent more for their utilties. Other factors are Japan imports 60 percent of their food and it cost more for importers and wholesalers due to weaker yen. Japan also imports 99 percent of the oil. New sales tax rate doesn't help either.

-1 ( +0 / -1 )

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