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Japan's Suga denies report Abe pondering delay of sales-tax hike

Friday, March 18, 2016 - 10:29

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Chief Cabinet Secretary Yoshihide Suga has denied a report in the Yomiuri newspaper saying Japanese Prime Minister Shinzo Abe is considering delaying a planned increase in sales tax for a second time if the economy continues to stagnate.

[TOKYO] Chief Cabinet Secretary Yoshihide Suga has denied a report in the Yomiuri newspaper saying Japanese Prime Minister Shinzo Abe is considering delaying a planned increase in sales tax for a second time if the economy continues to stagnate.

The paper said without citing its sources that Mr Abe was considering a one- to two-year delay in the tax increase to 10 per cent from 8 per cent, currently planned for April 2017.

Mr Suga told reporters there was no change in plans for Japan to increase the levy next year, except if a major financial crisis or natural disaster struck.

Mr Abe will make his decision after seeing first-quarter growth figures in May and judging conditions within the Group of Seven industrial powers when he hosts a G7 summit late that month, the Yomiuri said.

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Market voices on:

Mr Abe has long insisted that he would delay the hike only in the event of a shock on the order of the 2008 collapse of Lehman Brothers bank that ushered in the global financial crisis. But he recently suggested the possibility of another delay, and his government has begun informally discussing another postponement, sources previously told Reuters.

The premier raised the levy from 5 per cent in April 2014, as agreed under the previous government, to tackle Japan's massive public debt, but the move sent the economy into recession. He postponed the planned second increase, which was to have taken effect last October.

REUTERS

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