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Japan PM Noda’s party agrees to delay sales tax plan

 Japanese Prime Minister Yoshihiko Noda, left, and Indian Prime Minister Manmohan Singh pose for photographs before their scheduled talks in New Delhi...

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Japanese Prime Minister Yoshihiko Noda, left, and Indian Prime Minister Manmohan Singh pose for photographs before their scheduled talks in New Delhi...

Japan’s ruling Democratic Party (DPJ) compromised on a plan to double the sales tax by 2015 to help reduce the world’s largest public debt, delaying implementation by six months to help lawmakers meet a campaign pledge.

The proposal by Prime Minister Yoshihiko Noda would raise the sales tax from 5 percent to 8 percent in April 2014 and to 10 percent in October 2015. The agreement, reached late Thursday, must be approved by a government panel led by Finance Minister Jun Azumi before discussion with the opposition.

An aging population and two decades of low growth have saddled Japan with debt projected to exceed 1 quadrillion yen ($13 trillion) in the current fiscal year. Standard & Poor’s said last month it was considering lowering the Japan’s sovereign rating, already cut in January to AA-.

Nine members of Noda’s DPJ submitted resignations two days ago, citing the party’s failure to keep campaign promises. A former DPJ prime minister said in 2009 that the party wouldn’t raise the sales tax during the current lower house term, which ends in August 2013.

“The party has started collapsing, and Noda’s ground is breaking down,” opposition Liberal Democratic Party Secretary-General Sadakazu Tanigaki told reporters Wednesday.


Updated : 2021-07-29 11:35 GMT+08:00