Tag Archives: Consumption Tax Hike

Noda Might Face No-Confidence Motion Over Consumption Tax

Japanese Prime Minister Yoshihiko Noda is likely to face a no-confidence motion over his plan to raise the consumption tax.

Senior officials from three small opposition parties agreed Thursday to submit a no-confidence motion against the Noda cabinet to the House of Representatives, the lower chamber of parliament, in order to block the passage of bills to raise the tax.

The three parties–the Japanese Communist Party, the Social Democratic Party and Your Party–agreed that the no-confidence motion should be submitted before the House of Councillors, the upper chamber of parliament, votes on the bills. The Lower House approved the bills in June.Peoples Life First, a new political party set up by Ichiro Ozawa and his followers after they bolted from Nodas ruling Democratic Party of Japan in opposition to the tax increase, plans to join the three parties.

If the Lower House passes a non-confidence motion against a cabinet, the prime minister needs to resign or call a general election.

Japan Reaches Tax Deal That Could Help Shrink Debt

In a deal that could lead to Japan’s first substantial steps toward reducing its burgeoning debt burden, Prime Minister Yoshihiko Noda agreed with the country’s two largest opposition parties Friday on legislation to double the country’s consumption tax.

Mr. Noda has staked the fate of his administration on the bill, which would double Japan’s five-percent sales tax by 2015, hinting that he could call a general election if the plan fails to pass parliament before the current session ends next week.

During weeks of negotiations, Mr. Noda argued that Japan must raise taxes to shore up its social welfare and pension systems, which have come under growing strain as the country’s population ages. Japan’s public debt has already grown to over twice the size of its gross domestic product as social welfare spending grows and tax revenues dwindle in a deflationary economy.

Read the rest of the story: Japan Reaches Tax Deal That Could Help Shrink Debt.

10% Consumption Tax Hike Agreed by Japan’s Political Parties

Japan’s media were atwitter on June 8 with the long awaited if not completely expected news that the leading political parties had agreed after months of debate and discussion to raise the country’s consumption national sales tax, currently 5% to 10%..  The doubling will come in two steps:  the first to 8% from April 2014 and the second to 10% from October 2015.

The current Japanese Diet ends June 21.  Prime Minister Noda Yoshihiro has publicly “staked his political life” on achieving passage of the government’s bill to raise the tax.  The agreement of the three key parties—Noda’s Democratic Party of Japan DPJ and the main opposition Liberal Democratic Party LDP and Komeito—seems to have delivered Noda a great personal victory.

Read the rest of the story: Japan Confronts Fiscal Reality: Consumption Tax Hike Agreed.