Japan PM to delay tax hike over economy fears

GMT 10:41 2016 Saturday ,14 May

Arab Today, arab today Japan PM to delay tax hike over economy fears

Japanese PM Shinzo Abe plans to delay the consumption tax hike
Tokyo - AFP

Japanese Prime Minister Shinzo Abe plans to postpone a sales tax hike a second time, judging that boosting the tariff could hurt the world's third-largest economy, a newspaper said Saturday.

Abe has already informed senior government officials he plans delay the consumption tax hike, scheduled for next April, that would raise levy from eight to 10 percent, the Nikkei business daily said.

The last such rise, in April 2014 -- the nation's first in 17 years -- was blamed for pushing Japan into recession.

Deadly earthquakes that hit southwestern Japan last month have already put the brakes on the economy, while a rise in the yen has threatened to squeeze exporters' profits.

It is still unclear how long Abe, who first postponed the tax increase in November 2014, wants to put off the hike this time.

The premier may announce the delay on June 1, when he hold a news conference to mark the close of the current parliament session, and after he hosts a Group of Seven summit in Japan this month, the Nikkei said.

Postponing the hike would require legislation to be passed.

Critics say Japan must increase tax revenues in the face of soaring debts and to pay for the ballooning cost of welfare as the population ages. 

Government coffers are deep in the red, with public debt standing at twice the size of the economy -- the worst among industrialised economies.

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