Japan said on Monday it will not rule out corporate and household income tax hikes to fund its planned increase to defence spending next year.
Head of the ruling Liberal Democratic Party’s (LDP) tax policy panel Yoichi Miyazawa ruled out a sales tax rise, but said they would not rule out other tax hikes to finance Japan’s defence ambitions.
The announcement came two weeks after North Korea fired a ballistic missile test over Japanese territory without warning, which saw residents urged to take shelter.
Also on AF: ‘Huge’ Dollar Buying by China State Banks to Bolster Yuan
Japan’s defence ministry has asked for a 3.6% rise in spending to 5.6 trillion yen ($37.98 billion) for the next fiscal year starting in April.
That equals about 1% of Japan’s gross domestic product (GDP) of 544 trillion yen. Japan’s public debt burden is the industrial world’s heaviest at more than twice the size of its GDP.
The government has pledged to double defence spending to 2% of GDP over five years, which would imply raising it by about 5 trillion yen ($34 billion).
- Reuters, with additional editing from Alfie Habershon
Japan Consumer Inflation Hit 8-Year High in September: Poll
Japan to Take ‘Unprecedented’ Steps To Curb Electricity Bills