Tax

Over half Japanese against sales tax hike; PM support falls

Reuters News
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Posted: Dec 25, 2011 8:48 PM
Over half Japanese against sales tax hike; PM support falls

TOKYO (Reuters) - More than half the Japanese public oppose a proposed doubling of the country's 5 percent sales tax by mid-decade, a newspaper poll showed on Monday, boding ill for the government's aim of fleshing out its plan on overhauling taxes by a self-imposed year-end deadline.

The government is in the final stage of debate on sales tax hikes to pay for rising welfare costs, a step towards fiscal consolidation in a nation whose public debt is already twice the size of its $5 trillion economy.

But Prime Minister Yoshihiko Noda, a fiscal hawk who took office in September, is struggling to win broad support for the proposal to double the tax rate that was originally floated in June, with some ruling party members against it.

Among the public, those who disapprove of the sales tax increase comes to 53 percent, while more than 38 percent support it, a poll conducted over the weekend by the Nikkei business daily showed.

The sticking point in the ongoing debate is the exact timing of sales tax rises, along with which areas of welfare spending to expand and on tax credits for low-income families.

The opposition, which controls the upper house, earlier this month voted to censure two of Noda's ministers in the chamber, signaling he may face an uphill battle obtaining support for the tax plan.

The same Nikkei poll also showed that support for Noda's government has dropped to 36 percent, a fall of over 30 points since he took office and much less than the 53 percent who disapprove of him.

Fifty percent of the latter cited Noda's poor management of the government and the ruling party while 45 percent said he lacks leadership.

(Reporting by Rie Ishiguro; Editing by Joseph Radford)