Look for VAT hike on the agenda

消費税増税の動き

    The government's Tax Commission is taking a positive stance toward an increase. After Mr. Koizumi's statement, Mr. Hiro- mitsu Ishi, head of the panel, suggested that he would announce, perhaps as early as this autumn, a proposal spelling out how much the tax rate should be raised and when.

    The Liberal-Democratic Party, meanwhile, is moving toward boosting the tax in or after fiscal 2007 — after Mr. Koizumi's tenure as LDP president expires in September 2006. To that end, the party is planning to set up an in-house council. Thus a consumption tax increase linked to social security and fiscal reconstruction looms as the biggest policy issue after postal privatization.

    The Health, Labor and Welfare Ministry estimates that social security benefits — the sum of pension, health-care and welfare payments — will double in 20 years to ¥176 trillion, assuming that the government share of basic-pension contributions will increase to one-half. As a result, social security spending by the central and local governments will rise to ¥64 trillion from ¥26 trillion.

    The question is where the money will come from. Tax revenues for fiscal 2005, estimated at ¥44 trillion, make up slightly more than half of the ¥82 trillion government budget. The balance of outstanding government bonds at the end of March will total an estimated ¥483 trillion, or 11 times the annual tax intake. This rising debtload — the result of massive borrowing since the collapse of the asset-price bubble in 1990 — threatens fiscal viability.

    In the meantime, the makeup of tax revenues has changed significantly. While individual and corporate income tax payments have diminished markedly, revenue from the consumption tax — which was introduced in fiscal 1989 at the rate of 3 percent — has expanded steadily following a rate increase to 5 percent in 1997 and a broadening of the tax base. In fiscal 2005, this levy is expected to yield more than ¥10 trillion at the national level and ¥2.5 trillion at the local level. The central government intake represents more than 20 percent of the total tax yield in the 2005 budget — a share comparable to that of individual and corporate income tax revenues.

    The business community is in favor of boosting the consumption tax. Nippon Keidanren (Japan Business Federation) and Keizai Doyukai (Japanese Association of Corporate Executives) have each published a policy statement calling for phased increases of up to nearly 20 percent to secure a stable revenue source.

    The Democratic Party of Japan argues for an increase, on the condition that the revenue be used specifically for funding public pensions. The party and the business community note that value-added taxes in European Union states exceed 15 percent.

    Some members of the Tax Commission, however, say that problems in the social security system should be addressed first. That is reasonable. Problems are many, including those carried over from last year's pension reform. What is needed is a systemic redesign that deals with the realities of the aging society. The revenue issue ought to be discussed on that basis.

    Systemic reform is required of the consumption tax, although the tax has taken root in the daily lives of consumers during the past 15 years. A rate increase should be discussed as an integral part of such reform.

    One area of reform involves the tax privileges for small businesses — tax exemptions and deductions that effectively allow them to keep some of the tax paid by consumers. These privileges were curtailed, not abolished, beginning in April 2004. The number of small business taxpayers is said to have increased by approximately 1.3 million.

    Another problem is the regressive nature of the consumption tax. Because it is levied on a broad range of goods and services, the tax tends to impose a greater burden on low-income people. To correct this defect, the system must be redesigned. One way would be to apply a lower tax rate to food and daily goods, as is done in European nations.

The Japan Times Weekly
March 5, 2005
(C) All rights reserved

      政府税制調査会も増税に積極的で、石弘光会長は、今秋にも消費税増税の幅、時期などについて具体的提案を行なう意向を示した。

      自民党は、06年9月の首相の自民党総裁としての任期終了後、07年度かそれ以降に増税する意向で、そのために党内の協議機関を設置する。

      厚生労働省の試算によれば、基礎年金の国庫負担割合が2分の1まで増えると仮定した場合、社会保障給付費（年金、医療、福祉など）は今後20年間に176兆円に倍増する。社会保障給付に必要な国と地方自治体の公費負担額は現在の26兆円から64兆円となる。

      問題は財源をどうするかだ。05年度の税収は44兆円と予想され、82兆円の国家予算の2分の1ほどにしかならない。3月末現在の国債発行残高は483兆円となり、年間税収の11倍になる。増え続ける国家債務は健全財政を脅かす。

      日本経団連と経済同友会は、安定的財源確保のため、消費税の20%までの段階的増税を支持している。民主党も、税収を公的年金の財源に使うという条件で、消費税増税を支持している。

      一部の税調委員は社会保障制度の改革が先決と主張しており、妥当なことだと言える。必要なのは、高齢化社会に対応する抜本的改革である。税収問題は、それを基に議論すべきだ。

      消費者が払った消費税のうち、納税されずに、零細事業者などの利益になる「益税」も改革の対象にすべきだ。

      広い範囲の商品、サービスに課税される消費税は累減的で、低所得者層により重い負担になる。問題を是正するには制度改革が必要だ。ひとつの方法として、欧州諸国のように食品、生活必需品などに対し税率を低くすることが考えられる。