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Tuesday, June 22, 2010

Sales tax hike to take a few years: Kan

Talk of increase hits support rate


Staff writer

Prime Minister Naoto Kan said Monday it would take at least two to three years to increase the consumption tax.

Kan's comments came as public support for his Cabinet slipped by 6 percentage points from a week earlier to 58.8 percent, according to a weekend Kyodo survey. He brought up raising the tax Thursday.

During a news conference Monday at the Prime Minister's Official Residence summing up the Diet session that ended last week, Kan reiterated his strong determination to restructure the tax system, going as far as mentioning the possibility of holding a snap Lower House election once his administration settles on a blueprint.

"I believe it is necessary to provide an opportunity for the public (to have a say) whenever there is a big tax reform," Kan said.

While explaining that a tax hike will only take place at least after two to three years of comprehensive discussions, Kan stressed that snowballing social security costs require more than just issuing government bonds.

"Our sustainability will be in question if we continue to issue government bonds every year like we are doing today," he said.

Kan, who became prime minister only two weeks ago, apologized for not being able to support his predecessor, Yukio Hatoyama, who resigned earlier this month. But Kan pledged to continue efforts to regain the public's trust through policies that focus on strengthening the economy, building a healthy fiscal balance and providing better social welfare.

The Diet session that began in January saw Hatoyama resign along with Democratic Party of Japan Secretary General Ichiro Ozawa. The move has paid off so far for the ruling party, with opinion polls showing the DPJ regaining the 50 percent mark in public approval.

But support for Kan has dwindled over the past week since he mentioned the possibility of raising the 5 percent consumption tax, saying he will consider 10 percent as "one of the references" for raising the rate.

According to the Kyodo poll, Kan's disapproval rate stood at 30 percent, up 6.4 percentage points. The survey received 1,228 valid replies from randomly selected households nationwide.



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The Japan Times

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