Japanese Prime Minister Shinzo Abe pledges in a statement today that he will push ahead with a sales tax increase in October next year. Abe added that he would study tax exemptions on purchases of durable goods and take measures to help small businesses cope with the higher tax burden.
Yoshihida Suga, the chief cabinet secretary, said Abe instructed relevant ministers to come up with measures to mitigate the negative impact of tax increases. The increase was due in October 2015 but was delayed because of fears it would reduce consumer spending and hurt the economy.
Abe made the announcement at an extraordinary cabinet meeting, with a supplementary budget of around 940 billion yen approved for the reconstruction of areas hit by heavy rains, earthquakes and hurricanes earlier this year.
The last time the consumption tax was raised to 8% from 5% in 2014, Japan went through a short recession, but the government sees another increase as indispensable. "We will do our utmost to reduce the negative impact on the economy," Abe said.
