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Cabinet OKs sales tax hike bill amid widespread opposition.

TOKYO, March 30 Kyodo

The Cabinet of Prime Minister Yoshihiko Noda on Friday approved bills, including one to raise the country's sales tax rate, to pave the way for achieving his prized policy goal of putting Japan's worsening fiscal health in order.

But the passage of the bills is far from clear, with opposition to the tax hike lingering even within the ruling bloc, though Noda has said he is determined to advance this issue, staking his ''political life'' upon it.

The government and the ruling Democratic Party of Japan agreed early this week on the bill to increase the 5 percent sales tax in two stages, to 8 percent in April 2014 and to 10 percent in October 2015, to cover the nation's swelling social security costs.

After eight days of intraparty debate, DPJ executives abruptly broke off discussions early Wednesday morning, giving up on convincing opponents of the tax hike to agree on the issue. The move has triggered harsh criticism that the leadership decided on the tax hike with an iron hand.

Noda's tax hike proposal also prompted Shizuka Kamei, the head of the People's New Party, the DPJ's junior ruling coalition partner, to say his party will leave the coalition. As the majority of PNP members have argued that the party should maintain its partnership with the DPJ, the small party has effectively split.
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Publication:Japan Policy & Politics
Date:Apr 2, 2012
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