DPJ holds gathering to discuss bill to raise consumption tax


The ruling Democratic Party of Japan on Wednesday gathered 100 of its members to discuss the proposed bill to raise the consumption tax.

The government plans to raise the 5% consumption tax to 8% in April 2014 and to 10% in October 2015 to help cover ballooning social security costs.

However, Prime Minister Yoshihiko Noda, who wants to submit the bill to the Diet by the end of the month, has faced resistance to the bill from within the DPJ and as well as from opposition parties.

At Wednesday's four-hour meeting, DPJ Policy Affairs Chief Seiji Maehara addressed concerns from party members, TV Asahi reported. Opponents of the bill said a consumption tax will have a negative effect on the economy and that there is no guarantee that the consumption tax will not have to be raised further after 2016.

Meanwhile, Shizuka Kamei, who heads the DPJ's junior coalition People's New Party, told Noda on Wednesday that his party will not endorse the proposed bill, TV Asahi reported.

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More of the same,politicians with their head in the sand.The Japanese debt and the economy are a reality , so how do these objectors propose to deal with it. At least Prime Minister is Noda is trying to do something. and he seems to have the advice and backing of senior economists, not only in Japan but overseas as well.

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Strange never any talk of the out of control spending

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japan should do a controlled bankrupcy to regain control of finances, just like japan airlines

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Jack it up to 15% like you want to and be done with it already.

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Raising consumption tax on all products seem to be a bad idea.

Already the cost of basic commodities is high in Japan compared to US. The J government can probably increase consumption tax on luxury products. If the consumption tax is increased for all products than I guess the sales of made in Japan products will go down and import will increase thus creating more economic problems.

Cut down on the huge salaries and bonus enjoyed only by the top administration ppl or increase their tax..

Japan is one of the richest countries in the world... Japan ranks in the in top 5 list of countries which buy luxury products .. Come on there shoukd be a better solution than troubling the middle class families,...

1 ( +1 / -0 )

Sales tax on basic items could be reduced to 3% while for luxury items increased to 10% but basically I think sales tax is an unfair one but there again many mama and paps stores only survive because they get to keep the collected tax.

1 ( +2 / -1 )

The theory is that an increase in sales tax will cause needed inflation in Japan.

Employees will need more money to maintain the status quo, and their employers will charge more because goods (and employees) will cost more. If the hike is done gradually, like 1% per year, the transition to the higher rates should be less disruptive. The proposed transition is basically 5% in two years, so there may be some anticipatory inflation.

Inflation isn't always bad, especially in a country with near zero inflation.

As a side benefit, the government will have more of you cash to blow on cool bridges to nowhere.

0 ( +1 / -1 )

"More of the same,politicians with their head in the sand.The Japanese debt and the economy are a reality , so how do these objectors propose to deal with it."

Japan needs to obviate the issue of waste, graft and corruption in spending before raising taxes. The elimination of unnecessary programs, better cost controls, efficiency improvements and changes in how government manages money will save a considerable amount of money.

Raise the number of tax payers. Japan could easily open the country to greater employment of international workers in areas that are suffering shortages. With improved policies on labor and immigration, Japan could offset some of her aged population by allowing more international workers.
0 ( +0 / -0 )

Open Japan to more international business. With better practices, tax breaks and incentives Japan could be better possitioned to attract business. Currently these policies are encouraging companies to move to Singapore or other APAC locations. But as those sites become more expensive, Japan could step in to make the nation more attractive to foreign business.

Tohoku Energy Free Trade Zone. Let the world help rebuild Tohoku with a plan to open a free trade zone there for certain industries. Reduced taxes, reduced tarrifs and work to partner with the global community to make a zone that would easily compete with Singapore.

The bottom line is simple. So let me walk you through it.

Consuption Taxes are Raised. 2. Spending, already depressed, declines even more. 3. As a result of declining sales, profits drop so companies lay people off and unemployment rises. 4. Because the overall economy is depressed due to declining employment opportunities and consumer spending there are no jobs for these people so they end up on unemployment. 5. Increased demand for unemployment benefits either collapse the system or result in greater government spending. 6. We are back to where we started, talking about more tax increases to solve the problem.

No rational government raises taxes dramatically when unemployment is on the rise and consumer spending is so low.

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I saw Noda on the telly the other day banging on again about 'the UK has 17.5% VAT, 10% for Japan is nothing'. Why do the interviewers/press/other pollies never point out that places like the UK have no consumption tax on basics like food?

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And why do they never point out that Japan already has a host of other taxes for Government to squeeze more money out of the little people that countries with a higher VAT / GST don,t.....I,m talking things like the city tax, shaken, highway robbery fees for highways built with taxpayer money in the first place etc etc....

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If you want socialism, you have to pay for it. And socialism is always very expensive and bound to fail. The tax should be applied to ALL goods, not just luxury goods, so that everyone pays into the system.

Of course, there is a solution. Ship the elderly out of Japan. Send them to a cheaper third world country. That will reduce the costs to the social security system and taxes wouldn't have to be raised.

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Strange never any talk of the out of control spending

Yeah, you'd think they would get around to discussing this seriously at some point. Or maybe the problem is so big that they've pretty much given up and just hope that something improves-by luck/by magic-in the coming years.

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