© Reuters. Japan’s Prime Minister Fumio Kishida attends a roundtable interview with members of the foreign media at his official residence in Tokyo, Japan April 20, 2023. REUTERS/Issei Kato
By Yukiko Toyoda
TOKYO (Reuters) – Prime Minister Fumio Kishida said on Thursday he has no plan now to raise Japan’s sales tax rate, when asked about plans to fund new childcare measures aimed at encouraging people to have more children.
Support for childcare is a top priority in the world’s third-largest economy, where the number of births fell below 800,000 last year for the first time on record.
One influential politician from Kishida’s ruling Liberal Democratic Party told Reuters this month that the government should spend around 5 trillion yen ($37.2 billion) on a new plan, adding that extra debt issuance would not be ruled out.
Kishida, who has pledged to double Japan’s spending on childcare, said during a roundtable interview with members of the overseas media in Tokyo that he had no plan at present to tweak the sales tax rate to help fund new measures.
($1 = 134.5600 yen)
Japan’s Prime Minister Shinzo Abe has recently revealed that he is not reconsidering his current sales tax plan in order to fund an additional package of childcare measures.
This was announced during the Prime Minister’s regular press conference last week, as he looked to refute reports that he was planning to raise the consumption tax as a means of helping to pay for childcare measures being proposed in the country.
The Prime Minister went on to emphasize that while he was committed to taking measures to address the growing shortage of childcare facilities in Japan, he felt that increasing the consumption tax would not be the most effective solution to the problem.
“We remain committed to expanding the free childcare system and other necessary measures that support childcare,” Abe said.
“But, I’m not reconsidering changing our current tax plan.”
Abe’s past decision to raise the consumption tax from 5% to 10% in October 2019 has been heavily criticized by many in Japan, and the Prime Minister has acknowledged the impact of this decision on the Japanese economy.
However, the government is currently hoping to take measures such as increasing national spending and analyzing other taxation options in order to alleviate the financial damage felt by many in the making of their proposed childcare measures.
Even though Abe has announced that he has no current plan to modify his current sales tax plan, the government is determined to find solutions to the present childcare problem, and has said that it will continue to consider various other options in the near future in order to ensure a secure and prosperous future for the children of Japan.