Japan Sales-Tax Decision Due by Early October, Amari SaysJames Mayger
Japanese Prime Minister Shinzo Abe will make a decision on a sales-tax increase by early October, before a gathering of Asia-Pacific leaders in Indonesia, according to Economy Minister Akira Amari.
Abe will decide “at the latest” before a summit of leaders from the Asia-Pacific Economic Cooperation forum, which starts in Indonesia on Oct. 7, Amari said yesterday on NHK television.
Expert panels comprising business leaders, academics and policy makers are set to begin meetings today to consider if Japan’s economy is strong enough to withstand an increase in the tax. Gross domestic product grew an annualized 2.6 percent in the second quarter from the previous period, a result which Finance Minister Taro Aso said supported the case for an increase.
Amari said last week that there is a good balance of views on the panels, which will include Abe advisers Etsuro Honda and Koichi Hamada, who are cautious about increasing the levy.
The sales tax is set to rise to 8 percent in April from 5 percent now, an increase that Abe can postpone or cancel should he determine the economy can’t bear the impact. Abe will take into account the views of the expert panels and revised GDP data for the second quarter, due Sept. 9.
The Bank of Japan will release a third-quarter Tankan survey of business sentiment on Oct. 1, and Abe may also consider those figures, Amari said.
A poll published today by the Nikkei newspaper showed 17 percent of respondents support increasing the tax as planned, while 55 percent said that while it should be raised, the government should be flexible on the timing and size of the increase. 24 percent of those surveyed opposed the measure.
The survey was based on 895 responses from 1,476 households contacted, and gave no margin for error.