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TOKYO, Nov 13 (Reuters): Key Japanese cabinet ministers reiterated today that the government would eventually need to raise the nationwide consumption tax to improve its debt-burdened finances, a move widely regarded by analysts as inevitable but politically controversial.
With the highest debt-to-GDP ratio among industrial nations at 150 per cent-and set to worsen as an ageing population raises the cost of social spending-and as interest payments on existing debt keep growing, government officials are hoping to raise the 5 per cent tax levied on consumer goods and services in a few years.
Finance Minister Sadakazu Tanigaki, who has urged a decision to be made in the fiscal year starting next April, said on television that further cuts in spending and debt issuance were necessary but not sufficient to turn around the governments finances.
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