World Japan's prime minister announces sales tax hike from 8% to 10% The extra revenue will pay for healthcare costs for the country's ageing population, but there are fears that higher taxes will hit consumer spending and curb growth BL PREMIUM

Tokyo — Japanese Prime Minister Shinzo Abe on Monday pledged to go ahead with an increase in the national sales tax next October. Abe said the government would consider tax breaks for durable goods purchases, such as cars and homes, and come up with a scheme to ease the burden on small companies and small retailers once the sales tax is raised to 10% from 8%. The government will exempt food from the tax hike, but there are still lingering concerns that higher taxes will hurt consumer spending and curb economic growth. “We are scheduled to raise the sales tax to 10% from 8% in October 2019,” Abe said, according to a statement. “We have to face the problems caused by our ageing society and build a welfare system that is fiscally sound.” The government needs extra tax revenue to pay for ballooning healthcare costs for its rapidly ageing population. Japan has the world’s largest debt burden, at more than twice the size of its $5-trillion economy, leaving its public finances in a precari...