Tokyo reveals financial agenda for 2011
Source: Agencies |
January 5, 2011, Wednesday
|
Print Edition
Print Edition
THE Japanese prime minister wants 2011 to be the year Japan opens up to rest of the world and yesterday called for debate on raising the sales tax to prop up ailing finances as the country's population shrinks and ages.
To revive its economy, Japan needs to embrace free trade and reform its farming sector, Prime Minister Naoto Kan said in a press conference to set his agenda for the new year.
"I want this to be year one of -opening up the country" in the modern era, Kan said.
Japan is facing increasing competition from regional rivals like China, which overtook it to become the world's No. 2 economy, and South Korea, which is ahead of Japan in terms of free trade deals.
In office since June, Kan also raised the possibility of increasing the five percent sales tax to shore up the country's finances given its huge national debt, nearly double the country's gross domestic product, and spending on social programs.
Still, the move is risky. Kan disastrously suggested raising Japan's sales tax to as high as 10 percent before July's parliamentary elections, contributing to the ruling Democratic Party losing control of the upper house.
"The need for a debate about social welfare and the resources required, including tax reform and raising the consumption tax, is clear," he said.
Kan said he hoped to draw up a financial plan by June. He has announced plans to cut the corporate tax rate by five percentage points to 35 percent in a bid to help businesses stay competitive.
To revive its economy, Japan needs to embrace free trade and reform its farming sector, Prime Minister Naoto Kan said in a press conference to set his agenda for the new year.
"I want this to be year one of -opening up the country" in the modern era, Kan said.
Japan is facing increasing competition from regional rivals like China, which overtook it to become the world's No. 2 economy, and South Korea, which is ahead of Japan in terms of free trade deals.
In office since June, Kan also raised the possibility of increasing the five percent sales tax to shore up the country's finances given its huge national debt, nearly double the country's gross domestic product, and spending on social programs.
Still, the move is risky. Kan disastrously suggested raising Japan's sales tax to as high as 10 percent before July's parliamentary elections, contributing to the ruling Democratic Party losing control of the upper house.
"The need for a debate about social welfare and the resources required, including tax reform and raising the consumption tax, is clear," he said.
Kan said he hoped to draw up a financial plan by June. He has announced plans to cut the corporate tax rate by five percentage points to 35 percent in a bid to help businesses stay competitive.
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