Japan's lower parliament passes tax increase

Prime minister risks party split in negotiating new tax aimed at shrinking massive public debt.

    Japan's lower house of parliament has voted to double the sales tax to 10 per cent by 2015, as the government tries to grapple with massive public debt.

    Japan’s prime minister, Yoshihiko Noda, had staked his career and his government on getting the tax rise through parliament; he struck a deal with the opposition to ensure its passage. But his biggest challenge came from within his own Democratic Party – with the powerful Ichiro Ozawa and 56 of his supporters voting against their leader.

    The party now faces a split which could end its period in office. The question now is whether raising the sales tax will be a first step towards paying down Japan’s 12 trillion dollar public debt – or will it mean still less tax revenue in the long term.

    The opposition-controlled upper house should give its approval to the bill within weeks.

    Al Jazeera's Harry Fawcett reports.

    SOURCE: Al Jazeera


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