Raising the consumption tax would stabilize the social welfare system and encourage consumers to spend more, economic and fiscal policy minister Kaoru Yosano said Wednesday.
"Securing a stable source of funds for social welfare can secure a massive financial asset base for individuals, which could lay the foundation for increased consumption," Yosano said in prepared remarks to the Diet. "Sweeping reforms in taxes, including the consumption tax, are essential in sustaining economic growth."
Analysts decry the fact that policymakers are focusing on discussing the consumption tax at a time when exports are collapsing and companies from Toyota to Sony are firing workers. Quibbling over the levy as the recession deepens, they say, is preventing policymakers from implementing measures to revive the deteriorating economy.