IMF urges consumption tax higher than 10 percent in Japan

posted on November 1, 2015

The International Monetary Fund advised Japan on Friday to raise the consumption tax rate to more than 10 percent in the future to help promote fiscal reconstruction.

The IMF made the call in a report on the global economic outlook and policy challenges for major countries. The report will serve as a basis for discussions at the Group of 20 summit meeting slated for Nov. 15 and 16 in Turkey.

In the report, the IMF underscored the "need for a concrete and credible medium-term fiscal consolidation framework" in Japan.

While Japan plans to raise the consumption tax rate from 8 percent to 10 percent in April 2017 following a hike from 5 percent in April 2014, the IMF said that "additional consolidation measures will be needed."

They should include "more" rate hikes to be implemented gradually, as well as "entitlement-spending reductions," it said.

source by japantimes
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