Japan ruling party tax chief says panel agrees to raise taxes for defence boost
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Japan currently is planning to double the ratio of defence spending to 2 per cent of its GDP within five years.
PHOTO: REUTERS
TOKYO - Senior officials of Japan’s ruling Liberal Democratic Party’s (LDP) tax panel agreed on Wednesday to raise corporate and tobacco taxes and an income tax designed for disaster reconstruction to fund the defence budget, the tax panel head said.
“We confirmed the direction” of intra-party debate on tax hikes, tax chief Yoichi Miyazawa told reporters of the planned increases after a meeting of senior tax officials.
Opinions within the LDP were split on politically unpopular tax hikes to help finance a plan to double the ratio of defence spending to 2 per cent of Japan’s gross domestic product within five years to cope with assertive China, unpredictable North Korea, and Russia.
Saddled with the industrial world’s heaviest public debt burden, however, Japan’s government is struggling to scrape together funding sources to earmark defence spending of 43 trillion yen (S$428 billion) over the next five years.
Prime Minister Fumio Kishida has vowed to secure some one trillion yen in the fiscal year that ends in March 2028 by raising taxes, and what taxes would be targeted remained as question.
He has pledged to forgo tax hikes in the next fiscal year, but to adopt tax hikes in stages from fiscal 2024. REUTERS
