Worried that Japan's massive public debt will hurt the nation's long-term fiscal health, a Japanese business group is pushing for the tripling of the country's 5% consumption tax to 17% in 6 years, reports the Wall Street Journal.
The Keizai Doyukai, or Japan Association of Corporate Executives, argues that the nation needs to rely more on indirect taxes, such as the consumption tax, which is collected by businesses and not the government. Japan's current tax revenue relies too heavily on income tax, which will decrease as population drops, says the business group.
"The current system is fiscally unsustainable, and it's also very unbalanced," Masamitsu Sakurai, chairman of Keizai Doyukai, told the Journal. The group is also proposing a cut to pension premiums.
Sakurai adds that another major challenge facing Japan is the yen's strength. According to the Journal, Japanese manufactures have been increasing dollar-denominated purchases of materials to offset the decline in the value of their overseas sales in the dollar.
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