Japan PM Abe considering calling snap election if he delays hike in sales tax: Media

Japan's Prime Minister Shinzo Abe is considering dissolving the lower house of parliament and calling a snap election if he decides to delay a plan to raise the sales tax next year. -- PHOTO: AFP
Japan's Prime Minister Shinzo Abe is considering dissolving the lower house of parliament and calling a snap election if he decides to delay a plan to raise the sales tax next year. -- PHOTO: AFP

TOKYO, Nov 9 (Reuters) - Japan's Prime Minister Shinzo Abe is considering dissolving the lower house of parliament and calling a snap election if he decides to delay a plan to raise the sales tax next year, the Yomiuri Shimbun reported.

If Mr Abe does dissolve the Lower House, an election could be held on Dec 14 or Dec 21, the Yomiuri reported on Sunday, citing several government and ruling party sources. Mr Abe has also told members of his party's coalition partner of this plan, the Yomiuri said.

In a television interview on Friday, Mr Abe said he was not thinking of calling an early election, but then he hedged his bets by saying this is something a prime minister always has to say.

Mr Abe has to decide by year's end whether to go through with a plan to raise the sales tax to 10 per cent from 8 per cent in October 2015. Mr Abe could delay this plan by 11/2 years if third-quarter gross domestic product, which is due on Nov 17, struggles to accelerate, the Yomiuri said.

If Mr Abe does delay the tax hike, he would call an election to ask the public to judge his economic policies, the Yomiuri said.

A delay is not without its risks, because next year's sales tax hike has already been passed into law and Mr Abe would have to repeal this in Parliament.

Mr Abe could also be criticised for delaying a plan that is needed to earn tax revenue for rising welfare spending.