Japan’s indirect tax system hangs in the balance
10 August 2012
Salman Shaheen - ITR
After intense wrangling, the Japanese parliament has finally approved plans to double consumption tax. But it may cost Prime Minister Yoshihiko Noda his job.
The Bill to double consumption tax from 5% to 10% sailed through the lower house of parliament in June, but its passage from there has been anything but smooth, showing indirect taxes are not always the politically easy revenue raiser governments believe.
Advisers note that the government is looking to fill a $125 billion tax revenue shortfall owing to the cost of caring for an ageing population, but opposition to the increase which could stifle growth is strong.
Opponents of Noda’s tax plans forced a vote of no confidence in him yesterday. While he was able to win the vote, and eventually convince the wavering Liberal Democratic Party to support the Bill through the upper house today, it came at a heavy...
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