Sales tax finally passed


The provision to raise sales tax from 5% to 10% in three years was finally passed in the lower house, the House of Representatives, today. The vote was carried by 363 for and 96 against.

The tax had been a key pledge of Prime Minister Yoshihiko Noda and he had undergone two Cabinet changes and long negotiations with the opposition Liberal Democratic Party (LDP) to get today’s result.

The bad news for the prime minister is that 57 members of his ruling Democratic Party of Japan (DPJ) led by former leader Ichiro Ozawa voted against the tax.

For months Ozawa has been a thorn in the side of the leadership of the DPJ and the fear is that he may now lead a breakaway group from the DPJ. If 54 or more DPJ lawmakers were to leave the parliamentary party then the government would be without a majority.

In such a circumstance there is a high possibility of a no confidence vote and an early general election. The next scheduled election is is due to take place on or before Friday 30 August 2013.

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