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ECONOMY > Economic Policy

“Consumption tax rate needs to be 17 percent,” business chief

  • April 26, 2019
  • , Sankei , p. 10
  • JMH Translation

Kengo Sakurada

President & CEO Kengo Sakurada of Sompo Holdings, Inc., will assume office as chairman of the Japan Association of Corporate Executives on April 26. He sat down with media outlets including the Sankei Shimbun for an interview. All of the members of the baby boom generation will be 75 years or older in fiscal 2025, the 7th year of the Reiwa Era. Referring to the government’s goal of bringing the primary balance [tax revenue minus expenses other than debt-servicing costs] into the black by the target year of fiscal 2025, the soon-to-be chairman said, “The hike of consumption tax rate scheduled for October is insufficient to achieve the goal and it needs to be increased to about 17%.” In this way he expressed a sense of crisis.

 

Sakurada stressed that the government must “bring expenses in line with income” through such means as “flexible workstyle reform for seniors over 65 years old” as part of solving pension-related issues. He also urged the government to present a solution for the issue of revenue sources as soon as possible.

 

The business leader presented the idea of “using opportunities for young business owners and students to work together so that students can raise their awareness of participating in politics.”

 

Regarding ways to hire new graduates, Sakurada emphasized the importance of diversity, saying, “In addition to introducing year-round hiring of new graduates, a system of recruiting people in mid-career needs to be established to hire people with various experiences.”

 

Sakurada will be the association’s first chairman from the insurance industry. The government regulates the entry of foreign companies into the insurance industry. Some businessmen voice concern about whether a business leader from a regulated [protected] industry can speak frankly to the government. In response to such voices, the new leader said, “I have no intention to hold back in expressing my ideas to the government.”

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