From an interview with the Financial Times (gated, but can be read with a free registration), Japan’s PM Abe “has hinted that he may delay increasing Japan’s consumption tax, saying the move would be “meaningless” if it inflicted too much damage on the country’s economy”
- said the planned tax increase from 8 per cent to 10 per cent was intended to help secure pension and health benefits for “the next generation”
- But he added: “On the other hand, since we have an opportunity to end deflation, we should not lose this opportunity.”
- “By increasing the consumption tax rate if the economy derails and if it decelerates, there will be no increase in tax revenues so it would render the whole exercise meaningless.”
The article is here: Abe balances tax rise against economic damage
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Abe is is expected to decide on the tax in early December when the final Q3 growth data comes in.
