Japan's ruling coalition is arranging to broaden exemptions in a planned sales tax hike to cushion a blow to the flagging economy - a welcome move for consumers but a setback to fiscal discipline.
Prime Minister Shinzo Abe's ruling Liberal Democratic Party (LDP) and small coalition ally Komeito are in the final stages of a deal to exempt both fresh and processed foods from higher sales tax when it is raised to 10% from 8% in April 2017.
The exemption would lead to a loss of revenue worth more than one trillion yen (US$8.19 billion) - about a fifth of tax income brought by the planned tax hike. The government must now scramble for alternative funding sources to cover the revenue hole.
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Prime Minister Shinzo Abe's ruling Liberal Democratic Party (LDP) and small coalition ally Komeito are in the final stages of a deal to exempt both fresh and processed foods from higher sales tax when it is raised to 10% from 8% in April 2017.
The exemption would lead to a loss of revenue worth more than one trillion yen (US$8.19 billion) - about a fifth of tax income brought by the planned tax hike. The government must now scramble for alternative funding sources to cover the revenue hole.
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