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Govt to increase taxes to fund reconstruction
Japan's government intends to increase taxes for a temporary period to create funds of about 10 trillion yen, or about 130 billion dollars, to rebuild areas devastated by the March 11th disaster.

The policy was confirmed at a meeting of the government's task force for reconstruction held on Tuesday evening with all Cabinet ministers attending.

At the meeting, Prime Minister Naoto Kan asked the ministers to work quickly to formulate a basic reconstruction plan before the end of the month.

Reconstruction Minister Tatsuo Hirano reported that the intensive reconstruction planned for the next 5 years will cost 19 trillion yen, or about 240 billion dollars.

He said deficit-covering bonds will be issued for reconstruction and that taxes will be increased to help redeem the bonds. Taxes will be increased for 5 years in principle, and for 10 years at the longest.

The government plans to increase mainly core taxes and the government's Tax Commission will discuss details next month. Core taxes include income tax, corporate tax and consumption tax.

Hirano later told reporters that the government aims to announce both a basic reconstruction plan and a fiscal plan before the end of the month. He said the government will immediately start consulting related parties and will also hear views from opposition parties before making public specific figures involving the fiscal plan.
Tuesday, July 26, 2011 20:48 +0900 (JST)