Prime Minister Shinzo Abe could soon be proceeding with a 3% increase in Japan’s sales tax. Abe has experts to analyze the issue, among them is BOJ Gov. Kuroda who warns against delaying the sales tax bump.
Japan looks to raise their sales tax to 10% by October 1025.
In July, Bank of Japan Governor Haruhiko Kuroda said that “I do not think that raising the sales tax as currently planned will do any great harm to the economy,”. Kuroda said today that: “Ending deflation and raising the sales tax are achievable at the same time,”.
However, some analysts think this move could cause at least one quarter of economic contraction.
By raising the sales tax, Japan would like to stabilize long-term yields. Doubling sales tax is a very controversial and unconventional approach to help the desperate Japanese economy.
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