Japan Urged To Adopt 15 Percent VAT Rate
Credit: Tax News
Japan should commit to new gradual increases to its consumption tax rate, beyond 10 percent, to help rein in its substantial deficit, a new report from the International Monetary Fund says.
It said the Government should “place emphasis on a gradual, pre-announced schedule of consumption tax rate hikes, of 0.5 to 1.0 percentage points in regular intervals, starting as soon as possible, and continuing until the rate reaches at least 15 percent.”
Japan’s present eight percent consumption tax rate was scheduled to increase to 10 percent in April 2017, after an earlier delay that put forward the date from October 2015. It will now not be in place until October 1, 2019, at the earliest, with no future hikes scheduled as yet.
With the Japanese Government thought to be considering cushioning this hike to 10 percent with the introduction of a second, reduced rate of sales tax, the IMF urged authorities to instead preserve the “unitary structure of the tax.”