JAPAN: ABE EXPECTED postpone the VAT increase
2016-05-30 05:33
STOCKHOLM (AFX) Japan’s government is expected to postpone the VAT increase by two and a half years.
That said Masahiko Komura, deputy head of the ruling LDP, after a meeting with Prime Minister Shinzo Abe, reports Reuters.
He said the prime minister’s conviction to postpone the increase appears to be “very strong”, as the economy grows sluggish and it is almost time for the elections to the (upper house of) Parliament.
According to the plan, the VAT would be increased from 8 to 10 percent in April 2017 (initial date was October 2015).
It has been for a long time speculated that the government wants to postpone that date.
The prime minister is expected on Tuesday to introduce measures to support the economy and implement new reforms. An extra budget of stimulus measures is also relevant.
Cabinet Secretary Yoshihide Suga said on Monday that the prime minister will decide on VAT “in an appropriate way at the appropriate time”. He did not comment on the possible effects of a postponement.
Finance Minister Taro Aso said at the weekend that if the VAT rate is raised, it would require a new election to the lower house of parliament. Other government sources say the prime minister is not ready to call a new election.
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