Monday, 13th August 2012
In Business In Japan,
Japan agrees to double sales tax
The Japanese prime minister Yoshiko Noda has agreed a deal with the opposing Liberal Democratic Party (LDP) to raise the sales tax from five per cent to ten per cent by 2015.
That is despite many members of Noda's own Democratic Party of Japan voting against the move, which will see the sales tax increase to eight per cent in 2014.
Mr Noda made the decision amid hopes it will help to drive down the country's current public debt, although some analysts argue it will hurt consumer pockets.
In negotiating the change, which was part of Mr Noda's manifesto before he came into power, it was suggested the move could bring forward the next general election.
The prime minister has said he will dissolve the lower house "in the near term", with elections potentially coming ahead of the August 2014 deadline.
There was some relief for the economy in the first quarter of 2012, however, with gross domestic product growing 2.7 per cent.
Posted by Mark Smith