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LDP policy chief seeks party debate on raising consumption tax rate.

TOKYO, Oct. 3 Kyodo

Liberal Democratic Party policy chief Kaoru Yosano called Sunday for debate within the ruling party on raising the 5 percent consumption tax rate in Japan.

''If we sidestep this issue, the discussions on fiscal restructuring will not move forward,'' said Yosano, whom Prime Minister Junichiro Koizumi named as chairman of the LDP's Policy Research Council a week ago.

''The biggest issue facing the LDP and the Koizumi Cabinet is how to rebuild the fiscal administration. Deterioration in the fiscal situation will also deal a blow to the economy,'' Yosano said on a TV Asahi talk show.

He urged Finance Minister Sadakazu Tanigaki to proactively tackle the matter, including considering the possibility of raising the consumption tax rate.

While recognizing that an eventual increase in the tax rate is inevitable to finance the public pension system, Koizumi has pledged not to raise it during his tenure as LDP president, which ends in September 2006.

The government introduced the consumption tax in 1989. The rate was initially 3 percent and was raised to 5 percent in 1997.
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Publication:Japan Policy & Politics
Date:Oct 4, 2004
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