TOKYO, Sept. 12 (UPI) -- Japanese Prime Minister Shinzo Abe plans to keep to next April for raising the sales tax to 8 percent from 5 percent now, a source told Kyodo News Thursday.
The source said the government has pledged to ensure Japan's fiscal discipline and bring the economy out of 15 years of deflation. The report said the prime minister is also considering an economic stimulus package worth 5 trillion yen so the tax hike won't cause an economic slowdown.
Abe's government has been encouraged to raise the sales tax next April as scheduled after the April-June quarter gross domestic product growth was revised upward earlier this week to an annualized 3.8 percent from the previous estimate of 2.6 percent. The award of Tokyo to host the 2020 Summer Olympics also has raised hopes the economy will be further strengthened with the growth of construction and tourism industries.
The sale tax hike, the first since April 1997, is seen as being critical for restoring Japan's fiscal health, the report said. The fiscal numbers currently are the worst among major developed economies, with public debt at more than 200 percent of the GDP. The Abe government wants to cut the ratio of the primary balance deficit to Japan's GDP by half by 2015 and turn into a surplus by 2020.