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Suga: Solid recovery needed before tax hike

ReutersTOKYO (Reuters) — Japan’s top government spokesman said on Friday it was important to create an environment where the country can proceed with a scheduled sales tax hike in 2019.

Chief Cabinet Secretary Yoshihide Suga said it would be impossible to raise the sales tax if job availability was as low as it was before Prime Minister Shinzo Abe took power in 2012 and the yen as high as it had been then.

“Japan is no longer in deflation, so we need to take policies to ensure a virtuous economic cycle kicks off,” he told a news conference. “We need to ensure the economy does not suffer a downturn when the tax rate is increased in 2019.”

The remarks suggest Abe may backtrack on his pledge to proceed with the scheduled sales tax hike to 10 percent from 8 percent, if the economy loses momentum.

Abe announced last week a plan to call a snap election on Oct. 22 in the hope his Liberal Democratic Party-led coalition would keep its majority in parliament’s lower house, where it held a two-thirds “super majority” before the chamber was dissolved.Speech

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