Reuters: Possible Tax Cuts:

https://www.yahoo.com/finance/news/japan-sales-tax-cut-emerging-050336071.html

Article:

TOKYO (Reuters) - Japan will consider various measures, including tax cuts, to deal with deepening damage to its economy from the coronavirus outbreak, economy minister Yasutoshi Nishimura said on Tuesday, amid growing debate on the possibility of cutting sales tax.

A group of ruling party lawmakers last week proposed that the government temporarily eliminating altogether Japan's 10% sales tax and preparing a 30 trillion yen ($282 billion) supplementary budget for spending to address the hit to economic growth from the health crisis.

Although extreme, the proposal highlights the seriousness of issues facing the world's third-biggest economy, and has not been shot down completely by government officials like Nishimura.

While revenue from the sales tax was important to fund social welfare costs, Nishimura said, the government must take all available measures to support the economy.

"We'll look into a wide range of options on tax, fiscal policy and deregulation" to battle the damage from the outbreak, he said, speaking to reporters after a cabinet meeting when asked about the lawmakers' proposal.

Comments and Ideas:

At this point any ideas would not be extreme considering the nature of things now and soon.

The idea of eliminating the 10 percent sales tax might eliminate a burden for many consumers, but it might not get them back into the markets. But it might get them to buy more online. 

Tax cuts might be another area, while maybe extreme, might again the an incentive or relief for some. 

Deregulation is an overdue idea, and mostly likely there has always been too many business regulations in Japan that maybe has reduced the opening of new businesses especially innovative or new startups. 

Article:

The government's decision to implement a long-mooted increase in sales tax to 10% from 8% in October has been widely blamed for hurting the world's third-biggest economy, which shrank an annualised 7.1% in the final quarter of last year.

Many analysts expect another contraction in the current quarter amid the virus outbreak, which would mean two straight quarters of negative growth - the technical definition of a recession.

Nishimura's remarks follow those by Prime Minister Shinzo Abe, who also said on Saturday the proposal on sales tax was among options worth considering to support the economy.

Policymakers across the globe are scrambling to deal with the fallout of the epidemic that sent global stocks in a tailspin. The Bank of Japan ramped up asset purchases in an emergency meeting on Monday, joining global central banks in their efforts to stave off a global recession.

Abe's government is working on a huge-scale fiscal spending package, acknowledging an agreement by Group of Seven leaders to use all available policy tools to support growth.

Comments and Ideas:

The 10 percent sales tax, while the reasons might have been clear and maybe even needed. It seems now maybe it was the wrong time to do it. Much maybe a sales tax increase,for some or many, is never the right time.

Its most likely both the BOJ and the fiscal side will need to provide as much aid as the can over the next year, until the economy can get back to running on its own. But who know when that will happen.

For example when the economy does open up again, how long before the tourism industry gets back to some kind of normalcy, or maybe now get back to where it was but back to a sustainable level, where it can operate without BOJ and or fiscal aid.

Article:

"Business confidence is tanking to levels comparable to those during the Lehman crisis" in 2008, Nishimura said.

"Now is not the time to think about how to balance the budget. Rather, it's a time to do everything that's necessary to keep the economy on a solid footing," he said.

Meanwhile Finance Minister Taro Aso said on Tuesday that G7 finance leaders are expected to hold a conference call on Tuesday evening Tokyo time.

Comments and Ideas:

Balancing the budget right now is the least important priority. The most important idea is to help those in need; business, families, individuals etc. 

Use any and all forms or aid as needed to keep the economy and society going for as long as needed. 

There is more at stake than a balanced budget at this time.

Have a nice day and be safe out there!

© 2020, Tom Metts, all rights reserved