Japanese Tax Panel Suggests Possible Long Term Rise In Income Tax
By by Mary Swire, Tax-News.com, Hong Kong
17 December 2003

Hiromitsu Ishi, head of the Japanese government’s Tax Commission has suggested that income tax may have to rise in the long term as part of the country’s overhaul of its fiscal system.

"We don't know if we can raise the tax rate immediately, but there is a possibility (of a tax hike) in the long term depending on Japan's economic situation," Ishi told a press conference after submitting a report on tax reform for 2004 to Prime Minister Junichiro Koizumi.

In the report, the Commission recommended that the government shifts some of its core revenue raising powers in areas such as income tax to local governments by 2006. The panel also suggested that the government re-examines the idea of raising consumption tax from its current level of 5%, an idea firmly supported by Ishi, although rejected by Koizumi who has declared that the tax will not be raised whilst he is in office.

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