Tokyo, Sept. 8 (Jiji Press)–Japanese ruling party executive Akira Amari has sounded cautious about implementing tax increases in fiscal 2021, which starts in April next year.
“It’s debatable whether we should seek higher tax burdens” at a time when the Japanese economy is losing its strength amid the novel coronavirus crisis, Amari, chairman of the LDP’s Research Commission on the Tax System, said in an interview with Jiji Press.
He underlined the need for tax measures to cushion the economic impacts of the epidemic.
Stressing that the automotive industry is playing a key role in supporting the economy, Amari said that the LDP plans to propose an extension of a tax cut program for eco-friendly vehicles that is set to expire in April 2021.
He also hinted at the possibility of considering making a broad range of vehicles from major automakers subject to preferential tax treatment, including through the new automobile tax introduced last October, whose rate is lower for fuel-efficient vehicles.
Meanwhile, Amari reiterated his opposition to a cut in the consumption tax rate as an economic stimulus measure.
The tax is the “backbone” for the stability of society and a major source of funds for social welfare measures, he said, criticizing an opposition call for a cut in the rate as short-sighted.
The consumption tax rate was hiked to 10 pct from 8 pct in October 2019.
On a planned re-evaluation in fiscal 2021 of real estate prices for the calculation of fixed asset tax, Amari noted that Japan’s economic strength has faltered considerably since the previous re-evaluation was conducted.
A measure to reduce the burden of the tax should be devised particularly for commercial areas, he said.