Japanese consumers may have to help foot the reconstruction bill after last month's earthquake and tsunami caused US$300 billion of damage, further burdening a hugely indebted economy, a newspaper said on April 18.
The government is considering raising the sales tax by 3 percentage points to 8 percent when the new fiscal year starts next April, the Yomiuri newspaper said on April 18.
It would be the first
increase since 1997, though Japanese politicians have frequently debated such a
move as a way of digging Japan
out of its massive debt before the earthquake struck.
The Yomiuri said the government had decided against raising income and corporate taxes.
The government hopes to avoid issuing new bonds to fund an initial emergency budget, expected to be worth about 4 trillion yen (US$48 billion), due to be compiled this month.
But bond issuance is likely for subsequent extra budgets and markets are worried that post-quake rebuilding may hamper Japan's efforts to rein in its debt, running at twice the size of the US$5 trillion economy.
Japan must convey the message that it will continue to stick to fiscal discipline, said Finance Minister Yoshihiko Noda.
VOVNews/Reuters
