Opposition blasts DPJ, Kan on consumption tax hike proposal

Opposition parties have blasted DPJ President and Japanese PM Naoto Kan for rushing to propose a consumption tax hike.

Last Updated: Jun 23, 2010, 16:31 PM IST

Tokyo: Opposition parties have blasted DPJ
President and Japanese PM Naoto Kan for rushing to propose a
consumption tax hike, a topic that has surfaced as a hot issue
in the House of Councillors election slated for July 11.

In his opening remarks yesterday at a nationally
televised debating session involving the heads of nine
parties, Liberal Democratic Party President Sadakazu Tanigaki
criticized Kan for broaching the subject without having
discussions within the DPJ or referring to it in his policy
speech to parliament.

Since taking office earlier this month, Kan has said the
government would begin full-fledged discussions on the sales
tax hike issue after the election and use as a reference the
LDP`s proposal to double the current 5-per cent tax rate.

Natsuo Yamaguchi, who heads the smaller opposition New
Komeito party, said Kan should first apologize to the public
for "mistakes" in the Democratic Party of Japan`s campaign
pledges in last summer`s general election before proposing a
tax hike.

It is necessary for us to discuss what social security
should look like, rather than proposing upfront an increase of
the consumption tax rate to 10 per cent," Yamaguchi said.

The other party leaders participating in the event were
Kazuo Shii of the Japanese Communist Party, Shizuka Kamei of
the People`s New Party, Yoichi Masuzoe of the New Renaissance
Party, Mizuho Fukushima of the Social Democratic Party, Takeo
Hiranuma of the Sunrise Party of Japan, and Yoshimi Watanabe
of Your Party.

Meanwhile Secretary General Yukio Edano of the ruling
DPJ has indicated that tax refunds are likely to be the method
of choice for offsetting the added burden of any increase in
the consumption tax on people on low incomes.

With a doubling of the current 5-per cent consumption tax
rate in mind, Edano yesterday said, "So far the best-looking
option (as a method to ease the burden) is to refund the
5-percent portion. That way, it will be the same as not paying
(the increase) in the first place."

Edano`s remarks, came in response to Prime Minister and
DPJ President Naoto Kan`s suggestion that he will consider a
mechanism in which tax refunds can be made to redress the
regressive character of the consumption tax.