Japan must consider exemptions for 2017 sales tax, Abe aide says

[TOKYO] Prime Minister Shinzo Abe must consider exemptions when Japan raises the sales tax again after a hike in the levy last year sparked a recession, said Koichi Hamada, one of his economic advisers.

"I've changed my mind a bit about an increase in the sales tax" in 2017, Mr Hamada said in an interview on Monday. "The government should consider some exemptions in the sales tax hike on necessities or payback to poorer citizens to reduce their burden." The exemptions should be designed to help people living on pensions and low incomes as they will be hit the hardest, said Mr Hamada, 79, who is also an emeritus economics professor at Yale University. Mr Hamada didn't give details on specific exemptions.

Food and other basics should be exempted from a hike in the levy, Hiroyuki Hosoda, a ruling party executive, said in November.

Economy Minister Akira Amari said last week the nation is set to execute the planned tax increase to rein in world's largest debt burden.

Last year's recession prompting Mr Abe to delay the next planned hike in the tax from October 2015 to April 2017.

BLOOMBERG