The Japanese government on Monday announced a much anticipated sales tax hike in 2019 to address the nation’s huge public debt, despite warnings it could hobble growth in the world’s third-biggest economy. The point-of-sale tax will rise from eight percent to 10 percent from October
The Japanese government on Monday announced a much anticipated sales tax hike in 2019 to address the nation’s huge public debt, despite warnings it could hobble growth in the world’s third-biggest economy.
The point-of-sale tax will rise from eight percent to 10 percent from October next year as aging and heavily indebted Japan battles to finance snowballing social security bills — especially medical fees.
The tax rise was originally planned for October 2015 but was pushed back twice due to fears it could derail the fragile economy.
The last such move — in April 2014 — was blamed for tipping Japan into a brief recession.
This time, Prime Minister Shinzo Abe believes he can avoid a sharp decline in consumer spending by introducing measures to cushion the blow.
The government « will do its best to avoid a negative impact on the economy by taking every possible measure, » Chief Cabinet Secretary Yoshihide Suga told reporters.
However, Suga added that the planned hike could still be scrapped if there were a potentially historic recession like a global slump triggered by the 2008 collapse of Lehman Brothers.
