Tokyo, Sept. 3 (Jiji Press)–Japanese Chief Cabinet Secretary Yoshihide Suga, the front-runner in the upcoming ruling party leadership election, on Thursday sounded negative about the idea of reducing the consumption tax rate as a measure to shore up the economy.
Proceeds from last October’s consumption tax hike to 10 pct from 8 pct were allocated to cover the costs of free preschool and university education, Suga said at a press conference. “Revenue from the consumption tax is crucial for social security measures,” he added.
The Japanese economy has been faltering due to the fallout of the novel coronavirus crisis. According to preliminary government data released last month, the country’s seasonally adjusted gross domestic product in April-June plummeted a real 27.8 pct on an annualized basis from the preceding quarter, posting the biggest drop in the postwar period.
Suga said that realignment “could be one option” for regional banks in the nation, while noting, “It’s up to each bank to make a management decision.”
“Regional banks, which have been in a tough business environment due to population falls, need to enhance their business foundations by promoting management reforms in order to make contributions to local communities,” he said.
At Wednesday’s press conference to announce his candidacy in the Liberal Democratic Party’s Sept. 14 leadership election, Suga suggested the possibility of urging regional banks to speed up realignment, saying,” There are too many regional banks in the country.”