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[TOKYO] Japanese Prime Minister Shinzo Abe plans to postpone a planned tax increase and call a general election for December, the Sankei newspaper said on Wednesday.
Abe will delay the increase in the national sales tax by a year and a half to April 2017 as third-quarter GDP is likely to be weak and then take the issue to voters because the delay will exceed the current term of the Lower House of Parliament, the conservative daily said, citing unnamed government and coalition officials.
A government official close to the prime minister's office told Reuters on Tuesday that Abe was likely to delay the tax hike, while major political parties began gearing up for a possible election.
Abe raised the tax to 8 per cent from 5 per cent in April, sparking Japan's biggest economic contraction since the global financial crisis in the second quarter. He has said he will decide on whether to proceed with the planned October 2015 increase to 10 percent after seeing third-quarter GDP.
Preliminary GDP numbers are due on Monday.