Fumio Kishida, chairman of the Liberal Democratic Party (LDP) Policy Research Council, made it clear on Sept. 5 that he thinks the consumption tax should be raised to 10 percent in October 2019 as scheduled.
Speaking to the press at LDP headquarters, Kishida said, "An increase (to 10 percent) is essential, in order to ensure confidence in Japan from both the international community and within the markets. The hike must definitely be carried out."
He added that, "No time can be lost ensuring the sustainability of the social security system and fiscal health issues," keeping those who are cautious about the sales tax hike in check. Kishida also said, "We have to boost economic revival properly and create an economic climate in which a tax raise would be feasible," in response to concerns that a hike might worsen the Japanese economy.
On the issue of the consumption tax, Prime Minister Shinzo Abe has previously postponed an increase to 10 percent on two occasions. In a Yomiuri Telecasting Corp. (YTV) program that went to air on Aug. 5, Abe said, "The consumption tax increase in 2019 will go ahead as planned." However, within the LDP, some people strongly believe that Abe might delay the hike even further.
With Kishida placing emphasis on fiscal restoration, it is possible that he soon might find himself in a tug of war with Abe about when the consumption tax should be raised.