DPJ confirms Kan's earlier 10% sales tax remark as election pledge+

TOKYO, June 18 Kyodo -
The ruling Democratic Party of Japan will fight in an upcoming upper house
election with a pledge of taking action to double the nation's consumption tax
rate to 10 percent, the party's senior lawmakers said Friday.
The DPJ did not specify when and how much the sales tax rate would be raised in
its written election pledges publicized on Thursday. But Prime Minister Naoto
Kan, who heads the DPJ, told reporters that the opposition Liberal Democratic
Party's proposal of doubling the rate from the current 5 percent will be ''one
of the references.''
On Friday, facing reporters curious about whether the DPJ will handle the
premier's remark as an official pledge, Koichiro Gemba, the party's policy
chief, said it is ''natural'' to count the comment as one of the party's
promises.
''The prime minister was speaking with his own words at the location, where
(the party formally) announced its manifesto,'' said Gemba, who added the DPJ
will mention the number during the campaign period for the July 11 House of
Councillors election, which will kick off next Thursday.
Finance Minister Yoshihiko Noda added to Gemba's view.
''I recognize that (10 percent) is the figure put forward as (part of) the
manifesto,'' Noda said at a separate press conference while also pointing to
the need for the government to consider such measures as easing burdens on
people with lower incomes if it is to raise the tax.
Kan has said Japan needs a comprehensive reform in its tax system, urging
opposition parties to join relating debates.
Asked why he had specified 10 percent, Kan told reporters Friday that the rate
is appropriate if the government is to finance the country's social welfare
system only with tax revenues, or without issuing debt.
''The basis of (our) way of thinking is the same'' as the LDP's, Kan added.
But his inclination to a higher consumption tax rate drew criticism from within
his own ruling coalition.
Shizuka Kamei, who heads the junior coalition partner People's New Party, said
raising the sales tax rate before the economy fully recovers would only harm
consumers.
''We must at first improve people's lives. Without people having sufficient
purchasing power, a higher consumption tax rate would not lead to higher tax
revenues,'' Kamei told reporters.
Kamei last week left Kan's Cabinet, quitting as financial services and postal
services minister, in protest against the DPJ, which failed to have the Diet
pass a bill to tone down the privatization process of Japan's postal services
during the session that ended on Wednesday. But Kamei also decided to keep his
party in the bipartisan coalition.
The main opposition LDP publicized its election pledges Thursday, including a
proposal to raise the tax rate to 10 percent.
LDP chief Sadakazu Tanigaki on Friday said the DPJ was cozying up to his party
by suggesting the use of the LDP proposal as a reference point.
Referring to Kan's proposal to hold a cross-party study of tax system reforms,
Tanigaki repeatedly denied that the LDP will accept the offer, saying the
DPJ-led government should at first give up its big-budget policies as it would
otherwise face the need to raise the tax rate further above 10 percent.
''While it's important for major political parties to have a common
understanding (on the need for a hike), it would not stop at 10 percent as long
as last year's money-scattering DPJ campaign platform remains unchanged,''
Tanigaki said.
==Kyodo
2010-06-18 23:52:18


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