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RAPAPORT... Japan's Prime Minister Shinzo Abe will increase the country's sales tax on April 1, 2014 from 5 percent to 8 percent and add another two percentage points in October 2015 in an effort to arrest the country's growing debt. The initial sales tax increase is expected to raise $82 billion (JPY 8 trillion) during the first year, while the second increase is still subject to review. The nation's debt stands at about $10 trillion (JPY 978 trillion).
Abe also offered incentives, such as a $61 billion so-called government stimulus package to attract investment and tax breaks for corporations that hire and expand in Japan. In a televised speech, he stated that he had pondered whether or not the economy would suffer from higher sales taxes, but in the end, decided that there was no alternative if the nation intends to rebuild its financial strength.
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