TOKYO: Japan’s national sales tax was raised to 10% from 8% on Tuesday, amid concerns that the long-delayed move could derail the fragile growth path of the world’s third-largest economy.
Officials said ample measures were taken to minimize the impact of the hike after previous tax increases — a 2-point increase to 5% in 1997 and another to 8% in 2014 — brought on recessions.
Prime Minister Shinzo Abe postponed this hike twice but said it was unavoidable given rising costs for elder care and a growing national debt as the population ages and shrinks. After decades of fiscal deficits that have taken the debt to more than twice the size of the economy, Abe has promised a return to balance by 2025, but that will require growth to be sustained at a healthy pace.
(Agencies)