May 24, 2016 / 5:31 AM / a year ago

Abe aide says raising Japan's sales tax would win global trust

TOKYO (Reuters) - Raising Japan’s sales tax to 10 percent from 8 percent as planned from April would be the best way to win the trust of international society, unless special circumstances intervene, a close aide to Prime Minister Shinzo Abe said on Tuesday.

Japan's Deputy Chief Cabinet Secretary Koichi Hagiuda speaks during an interview with Reuters at Prime Minister Shinzo Abe's official residence in Tokyo, Japan, May 24, 2016. REUTERS/Toru Hanai

Deputy Chief Cabinet Secretary Koichi Hagiuda told Reuters in an interview he could not rule out the possibility that Abe would call a snap election for parliament’s lower house if opposition parties submitted a threatened motion of no-confidence in the government.

Hagiuda’s comments follow speculation that Abe would postpone the sales tax hike and call a snap general election alongside a scheduled poll for parliament’s upper chamber on July 10.

“It has been decided (to raise the tax) from next April,” Hagiuda said. “As long as no special situation arises, wouldn’t going ahead as planned be the better way to win the trust of international society?”

He added that he did not think the current economic situation warranted a change in the plan.

An initial rise in the sales tax to 8 percent from 5 percent in 2014 tipped the economy back into recession, but some ruling party lawmakers favor offsetting any potential damage this time with a huge government spending package.

Hagiuda also said opposition parties submitting a no-confidence motion, even if it were rejected, would give Abe a reason to seek a popular mandate in a snap election.“Wouldn’t this give the leader of the country a reason to ask the people if they agree?” asked Hagiuda.

Reporting by Ami Miyazaki and Linda Sieg; Editing by Chang-Ran Kim and Eric Meijer

Our Standards:The Thomson Reuters Trust Principles.
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