Japan`s Abe lifts up sales tax for the first time since 1997 Japanese Prime Minister Shinzo Abe raised Japan’s sales tax for the first time in 16 years, in line with adding 5 trillion yen ($51 billion) to stimulate the nation’s economy. Sales taxes increased from 5% to 8%, the first rise since 1997, undermining Japan’s debt without affecting on his plans to end deflation. Abe aims to support domestic spending and exempt Japanese companies from taxes to encourage capital spending and rising wages. Recently, the Premier called Japanese companies to raise wages but ignored his calls as they reject his sales hike plans. However, after current taxes exemptions to Japanese companies, wages are expected to rise soon. On the other side, Japanese government should monitor the nation’s economic updates closely to avoid any negative impact from the new sales hike plan and support Japan’s economic growth. Back in 1997 plans higher tax plans did not go well and embarrassed the Japanese economy, and Abe will most probably avoid the a new embarrassment while after all the support he earned for to sustain his stimulus plans. Abe faces raised challenges to keep the nation’s economic recovery pace, as the Japanese economy grew by 3.8% in second quarter and consumer prices rose to ensure his targeted inflation plans.
Posted on: Wed, 02 Oct 2013 07:31:43 +0000
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