It was reported on 2 January 2012 that Japan’s Prime Minister has been able to fulfill his government’s target to produce a detailed plan for future consumption tax rises, but only after his personal intervention at a meeting of the ruling Democratic Party of Japan (DPJ).
The government has a medium-term policy of funding Japan’s increasing social security costs and halving its primary budget deficit by 2015, largely by the means of doubling consumption tax to 10% in stages.
The Prime Minister had previously given a commitment to submit a bill for the gradual consumption tax rate rises to parliament before the end of the current 2011 fiscal year at end-March 2012.
It had been indicated that the timing of the consumption tax increases would be determined by the strength of future growth in the domestic economy, and it is likely that the first 3% rise in the consumption tax, to 8%, would have to be introduced in October 2013, with another similar increase to be expected in 2015.
