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Abe may leave tax hike to new PM

China Daily | Updated: 2016-05-30 07:13

Japanese Prime Minister Shinzo Abe intends to push back his debt-loaded country's next tax hike for two and a half years, when he will likely have left office, reports said on Sunday.

Abe on Saturday told his close aides, including Finance Minister Taro Aso, that he intends to push back a planned raise in taxes to October 2019, according to Japanese media.

Abe's premiership will end in September 2018 unless his ruling Liberal Democratic Party approves an exceptional measure to extend his leadership.

This means Abe will likely leave the tricky work of imposing heavier taxes - a key measure which would help pay down one of the biggest debt loads among rich nations but may also undermine Japan's frail economic recovery - to his successor.

Tokyo already postponed raising the tax from eight to 10 percent last year to April 2017.

Abe had previously said that his government would only push back the long-planned consumption tax hike in the event of "a grave situation" - on the scale of the collapse of Lehman Brothers or a major earthquake.

Deep in the red

At the two-day Group of Seven leaders summit, which concluded in Japan on Friday, Abe argued that the global economy risked a "crisis", though Germany's Angela Merkel and International Monetary Fund chief Christine Lagarde reportedly said that prediction was too negative.

Tokyo's last sales tax rise in April 2014 - the nation's first in 17 years - was blamed for stalling a nascent economic recovery and pushing Japan into a recession from which it has barely recovered.

Japanese government coffers are deep in the red, with public debt standing at twice the size of the economy - the worst among industrialized nations.

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