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Japan to freeze sales tax for at least two years
Posted: 21 June 2010 2048 hrs

  Japanese Prime Minister Naoto Kan
 
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TOKYO : Japan's Prime Minister Naoto Kan stressed Monday that his government won't raise a key tax for several years, speaking after a dip in approval ratings and ahead of a parliamentary election.

Kan has in the past advocated doubling the five-percent sales tax to bring down Japan's huge public debt, which is nearing 200 percent of gross domestic product, the highest level of any industrialised nation.

But, speaking at a press conference Monday ahead of July 11 upper house elections, Kan emphasised he would seek the support of the conservative opposition and from the electorate before raising the unpopular tax.

"At the earliest... it will take at least two years, three years or a bit longer," he told journalists.

"What I am stressing is that the government must build a strong economy, a strong fiscal situation and strong social welfare all at the same time. I'm not saying building a stronger fiscal situation has to come first."

Asked if he would call general elections before raising the tax, Kan said: "Whenever a major tax reform is carried out, we need to provide our people with an opportunity to make a decision."

Earlier in the day the Asahi Shimbun newspaper said support for his cabinet, which came to power less than three weeks ago, had slipped to 50 percent in a weekend survey, down from the 59 percent a week earlier.

The top-selling Yomiuri Shimbun also said approval was down, to 55 percent from 59 percent a week ago.

Voters were divided over whether the government should raise the consumption tax to help fund the nation's rising welfare bill.

In the Yomiuri survey, 48 percent said they approved of Kan's decision to discuss the consumption tax hike, while 44 percent disapproved of it.

But the Asahi survey said only 39 percent supported Kan's discussion about tax hike, while 50 percent opposed it.

The survey results indicated that opponents of the tax hike were starting to distance themselves from the Kan government, the Asahi said.

Among those who favoured the hike, the approval rating stood at 63 percent, compared to only 41 percent among people who opposed a tax hike, the Asahi said.

- AFP/ir

 


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