A senior official of the ruling Liberal Democratic Party told business leaders Thursday that the consumption tax rate should be raised from the current 5 percent when the economy recovers.
"Japan's consumption tax rate is very low," LDP Policy Research Council Chairman Kosuke Hori said. "A tax system overhaul should be implemented if the economy recovers."
Hiroyuki Sonoda, acting chairman of the LDP council, also told the business leaders the consumption tax should be hiked to secure financial resources for social security spending, which is set to expand by ¥1 trillion annually.
Fujio Mitarai, chairman of the Japan Business Federation (Nippon Keidanren), the largest business lobby, asked the senior LDP officials to promptly implement additional economic stimulus measures under a pending supplementary budget.
The business leaders also urged the LDP to specify the future picture of social security, budget reconstruction and tax reform.