Tokyo: Japanese consumers may have to help foot the reconstruction bill after last month’s earthquake and tsunami caused US$300 billion (S$374.2 billion) in damage, further burdening the hugely indebted economy, a foreign newspaper said.
It would be the first increase since 1997, though a sales tax hike had been the subject of fierce political debate before the earthquake struck as one way for Japan to dig itself out of its massive debt.
The government is considering raising the tax by 3 percentage points to 8 per cent when the new fiscal year starts next April, the Yomiuri newspaper reported.
“It was clear even before this disaster and the need to secure funds for reconstruction that to ensure a sustainable fiscal situation, some sort of reform of spending and revenues was necessary,” said Internal Affairs Minister Yoshiro Katayama.
“The debate over the fiscal situation is not something that began with this disaster,” he told reporters.
On Monday, a poll by the Nikkei business daily showed about 70 per cent of Japanese voters would support a tax hike, but want unpopular Prime Minister Naoto Kan to be replaced. The government hopes to avoid issuing new bonds to fund an initial emergency budget, expected to be worth about ¥4 trillion (S$60.5 billion), due to be compiled this month.
But bond issuance is likely for subsequent extra budgets which will only make it harder for Japan to rein in its debt, already running at twice the size of the country’s US$5 trillion economy.
Dear TNT Reader,
At The News Tribe, our mission is to bring you free, independent, and unbiased news and content that keeps you informed and empowered. We are committed to upholding the highest standards of journalism, as we understand that we are a platform for truth.
Apart from independent global news coverage, we also commit our unique focus on the Muslim world. In an age marked by the troubling rise of Islamophobia and widespread misrepresentation of Muslims in Western media, we strive to provide accurate and fair coverage.
But to continue doing so, we need your support. Even a small donation of 1$ can make a big difference. Your contribution will help us maintain the quality of our news and counteract the negative narratives that are so prevalent.
Please consider donating today to ensure we can keep delivering the news that matters. Together, we can make a positive impact on the world, and work towards a more inclusive, informed global society.
Donate Monthly Subscription Annual Subscription