Japanese Finance Minister Taro Aso attends a news conference after the G-20 Finance Ministers and Central Bank Governors' meeting at the IMF and World Bank's 2019 Annual Spring Meetings, in Washington on April 12. Photo: REUTERS/James Lawler Duggan
politics

Aso quells speculation sales tax hike may be delayed

20 Comments
By Tetsushi Kajimoto

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The previous tax increase to 8 percent from 5 percent in April 2014 hit consumers hard and triggered a sharp slump in the world’s third-largest economy.

And there is no reason why the same wont happen again. Circumstances have not changed to the point that the increase will not affect the average consumer!

No thank you!

9 ( +10 / -1 )

Tax the poor reduce the taxes for companies... Very bad!

8 ( +9 / -1 )

The only upside is that all those one yen coins won’t be so needed.

3 ( +4 / -1 )

The only way to effectively increase the consumption tax without negativity impacting the economy is to increase wages at least by the same percentage. But this is Japan, where common sense is sometiimes absent.

7 ( +9 / -2 )

@BlackFlagCitizen But then companies would get hit with a double whammy - pay 2% more for everything they have to buy and pay their employees 2% more. That would put some out of business.

-5 ( +1 / -6 )

Wages stagnant, and in many cases decreased 60% of the workers on part time contracts. Just enough income for paying tax and rent, forget Lehman brothers the LDP have perpetrated a far greater crime. Goods are reducing in size, but cost the same? A pay rise not on the horizon. Yet a tax hike is? Companies get a tax reduction that's simply not fair. Stupidly I assumed that government was there to enhance life not strip it of happiness. Big smile from a rich man now, when he trips over a homeless persons box, a new tax on cardboard shelters will be passed.

5 ( +6 / -1 )

@Serrano

Wages have been stagnant for decades in Japan, while businesses have been raking in profits. It's time businesses start paying their employees. They're already getting free over time labor from their employees - what more do they want?

12 ( +13 / -1 )

The government is split on the issue. My guess is PM Abe will postpone the tax and call a double election on the issue.

3 ( +5 / -2 )

The previous tax increase to 8 percent from 5 percent in April 2014 hit consumers hard

Pretty subjective statement there.

and triggered a sharp slump in the world’s third-largest economy.

yeah but there had been a boost to the economy BEFORE the hike, which is conveniently forgotten.

Since then Abe has delayed the planned hike twice as he prioritized economic growth over fiscal reforms

Nonsense, he never prioritized economic growth, he never cut spending, he only increased it.

If he wasn’t boosting the budget spending to 100 trillion yen, but instead shrank it to 90, the consumption tax rate could even be cut.

The public need to vote for spending cuts if they want those rather than bigger government and higher taxes.

The government has already planned to spend 2 trillion yen ($17.9 billion) on measures to offset the blow to consumers from a 10 percent sales tax.

Thats right, they are spending more money, but not to help - but to paper over the fact that you are paying more tax and they are taking a slice before they give it back to you.

The Organisation for Economic Cooperation and Development (OECD) urged Japan on Monday to raise the sales tax to as high as 26 percent

Rather, Japan needs to transition to a savings based social security system, rather than this hope-to-pay-as-you-go nonsense that Japan and many other supposedly first world countries persist with.

-4 ( +1 / -5 )

Aso and assorted LDP grandees have heads empty of ideas and can only pull stuff from their bagful of stale tricks. What's the Japanese for "winging it"?

4 ( +4 / -0 )

Everthing Abe does destroys this country more. He has to raise tax because already spent our money on 150 grounded F-35s.

4 ( +4 / -0 )

Basically, they are panicking and seeing how certain news is going to impact things. They will delay it again, despite the calls not to, when they realize, and rightly so, people are just going to spend less. You can't go around spending all your money on yearly and exponential increases in budgets, offer heaps of other countries aid, and now even churches -- which is against the law here -- and then say there is no money and taxes have to be raised, especially knowing it'll just be for the next military budget and not for the things promised in the LAST increase.

3 ( +5 / -2 )

The govt has often pointed out that the fragility in consumption is the main factor holding back a sustainable and recovery. And now they're going ahead with a measure that will -- specifically hurt consumption. Yeah, that makes sense.

If govt debt yields were going thru the roof or other ominous volatility, then maybe there'd be a rationale. But they aren't. In fact, the 10 year JGB is negative, last time I checked. Crazy.

4 ( +5 / -1 )

The government has already planned to spend 2 trillion yen ($17.9 billion) on measures to offset the blow to consumers from a 10 percent sales tax.

Right! So instead of decreasing debt we are gonna spend it! Don’t hike the tax and there won’t be any further blows to consumers...job done!

Many Japanese firms want the authorities to go ahead with the planned tax hike, but feel that additional government spending is needed to cushion the blow on the economy, a Reuters monthly poll showed.

Right! So there you have it. The money from the additional tax on the population will actually be used to paid companies for additional “work” keeping the well oiled state-to-company machine rocking and rolling. One giant old boys club and boy o boy are they smug about it!

Its certainly ain’t going to be used for what they said it would be!

4 ( +4 / -0 )

Terminal decline.

3 ( +3 / -0 )

Yeah, as I said, the PM’s aide is not a reliable source.

Have a go at the grin on Aso’s face. If he was rubbing his hands together it would be perfect. It’s time to get all your money out of Japan and start planning your evacuation. This sales tax hike is going to spell disaster for the Japanese economy. The post Olympics japan is going to be a shocker. Get while the getting is good!

4 ( +4 / -0 )

The sales tax hike to 10 percent is needed the most to secure stable financial resources to pay for social security for all generations, in order to cope with the ageing population,” Aso told reporters after a cabinet meeting. 

Since Aso , Abe and co. are apparently so concerned about securing stable resources for social security can you pls reform the system at the same time so fatcats such as J politicians, J-Inc senior managment and their ilk are not sucking away public pension payments which they certainly dont need from the average Taro?....oh...too hard to do is it?

3 ( +3 / -0 )

The government has already planned to spend 2 trillion yen ($17.9 billion) on measures to offset the blow to consumers from a 10 percent sales tax.

i.e., more money wasted on unnecessary construction projects.

It's so blatantly obvious what this tax raise is about.

“The sales tax hike to 10 percent is needed the most to secure stable financial resources to pay for social security for all generations, in order to cope with the ageing population,” Aso told reporters

The big lie.

0 ( +1 / -1 )

I won’t forget the time when Aso was boss, minutes before the election he gave people ¥10000 not as a bribe, but for them to buy Japanese products to stimulate the economy. All was spent on alcohol and fried chicken. Nobody bought a new fridge.

abe will do the same.

0 ( +0 / -0 )

Just raise it to 100% on Jan 01, 2020 so at the end of that year, they can still complain there is no enough money to pay for everything. It will never be enough when you are spending other peoples money.

1 ( +1 / -0 )

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