Japan should reduce government spending including salaries of public employees before raising the sales tax, Japanese Minister of Finance Yoshihiko Noda said yesterday.
“We need to cut costs for government employees and parliament first,” Noda said in a TV Tokyo Corp’s program. “We must explain to the public that we need sufficient funds to ensure sustainable social security.”
Japan’s national sales tax will be raised to strengthen the finances of the world’s second-largest economy, the ruling Democratic Party signaled in its midterm election manifesto. Japanese Prime Minister Naoto Kan said on Thursday that he would consider a proposal by the main opposition Liberal Democratic Party to double tax to 10 percent.
“We have to rebuild government finance” by stopping waste and spending money in growth areas, Noda said yesterday. “It’s natural to go beyond parties to talk about this.”
The government will discuss changes in corporate, income and sales taxes after the election next month, Noda said. The government also should hold elections to earn the public’s confidence whenever it raises or cuts taxes, he said.
Japan’s government has also pledged to cut the nation’s tax on businesses and nurture the environment and healthcare industries as part of a plan to defeat deflation and end two decades of economic stagnation.
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