Japan panel backs sales tax hike coupled with stimulus
TOKYO (Reuters) - Japan's government won backing for a controversial decision to raise the national sales tax in 2014 after influential members of a special advisory panel said the step would not threaten economic recovery or business confidence if it was coupled with other stimulus.
"Japan's economy is steady at the moment and we should raise the tax as planned," Mr Hiroshi Yoshikawa, a University of Tokyo economist, told reporters on Saturday as he left the last session of a week-long, government hearing that also featured business leaders and consumer advocates.
Prime Minister Shinzo Abe convened the panel to hear a wide range of views on whether to press ahead with a planned hike in the consumption tax to 8 per cent from the current 5 per cent in April. Unless Mr Abe changes the plan, the sales tax will be raised to 10 per cent in October 2015.
Advocates, including officials at the Ministry of Finance, say raising the tax would be an important first step in trying to lower public debt, which is the worst among industrialised countries, at more than twice the size of Japan's economy.