Japan Needs 6.6 Trillion Yen In New Tax Revenues In Next 4 Years

Tokyo, Japan (AHN) - New tax revenues amounting to $57 billion USD (6.6 trillion JPY) will be needed by Japan between 2007 and 2011 for the nation to meet its target annual growth rate of 3 percent. Aside from additional taxes, the government must reduce spending by $123 billion USD (14.3 trillion JPY) for the same four-year period.

But that amount did not take into consideration inflation. Economy Minister Hiroko Ota told Wednesday state officials attending a council meeting on Economic and Fiscal Policy, if the state spends an additional $8.6 billion USD (1 trillion JPY) every fiscal year, a $27.7 billion USD (3.2 trillion JPY) tax increase will be required to meet national economic growth targets.

"The government will make the best efforts to cut spending and promote economic growth. But we will need to increase tax revenues to achieve the primary balance in 2011 if necessary. We cannot leave (the paying down of our huge debts) to future generations," Japan Times quoted her.

Members of the Liberal Democratic Party and the New Komeito are pushing for bigger spending on senior citizens and rural areas.

Among the new tax measures being considered is raising the consumption tax by 2 percent from the current 5 percent. On August Welfare Minister Yoichi Masuzoe said a hike in consumption tax will be acceptable to Japanese if it will be used to pay for nursing-care services in view of the country's aging population.