Abe Predicts Bump in Tax Revenue as Japan EmergesFrom Recession – BloombergJapanese Prime Minister Shinzo Abe’sgovernment ...
yesterday evening. That tax receipts will be higher this time is“a big deal,” he said.The yen was little changed today at ...
recent plunge in the yen as a worry. The currency has declinedto its lowest against the dollar since June 2010 as pushes f...
Source Article from                                   http://www.bloomberg.com/news/2013-01-28/abe-predicts-bump-in-tax-re...
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Abe Predicts Bump in Tax Revenue as Japan Emerges From Recession – Bloomberg

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Abe Predicts Bump in Tax Revenue as Japan Emerges From Recession – Bloomberg

  1. 1. Abe Predicts Bump in Tax Revenue as Japan EmergesFrom Recession – BloombergJapanese Prime Minister Shinzo Abe’sgovernment predicts that tax revenue will exceed cash raisedfrom bond sales for the first time in four years as the nation’seconomy emerges from last year’s recession.The government forecasts 43.1 trillion yen ($474 billion)of tax revenue for the coming fiscal year, which starts April 1,compared with 42.85 trillion yen from issuing bonds, FinanceMinister Taro Aso said in Tokyo late yesterday. Total spendingis forecast at 92.6 trillion yen.A rosier outlook for tax receipts may help Abe as heapplies short-term fiscal stimulus and prepares for an overhaulof levies designed gradually to rein in a debt burden that’smore than twice the size of the economy. He’s relying onimprovements in corporate profits even as the shutdown of mostof the nation’s nuclear plants and weakness in the yen drive upenergy costs for manufacturers.“We can’t say that fiscal discipline is fully ensured bythis budget,” said Junko Nishioka, chief economist at RBSSecurities Japan Ltd. and a former Bank of Japan official.“Actual tax revenue could fall short of the government’sforecast.”The government today raised its economic growth forecastfor the next fiscal year to 2.5 percent from an August estimateof 1.7 percent after declines in the yen and the unveiling of astimulus package this month. Nominal growth is seen at 2.7percent, from an earlier forecast of 1.9 percent, the cabinetoffice said.Consumer price growth is seen at 0.5 percent. The economyshrank in the second and third quarters of last year. Thegovernment’s initial forecast for tax revenue in the 2012 fiscalyear was 42.3 trillion yen.‘Abnormal’ Picture“We’ve been saying for three years that bond issuanceexceeding tax revenue is abnormal,” Aso told reporters 1/4
  2. 2. yesterday evening. That tax receipts will be higher this time is“a big deal,” he said.The yen was little changed today at 90.89 per dollar as11:10 a.m. in Tokyo. The Nikkei 225 Stock Average was down 0.5percent.Abe gives a policy speech to the opening session of theDiet today, laying out his agenda as he seeks support for comingBank of Japan (8301) personnel appointments and his tax overhaul. He’sthe first Japanese prime minister to see his popularity rise inhis initial month in office since Junichiro Koizumi in 2001,according to a Nikkei newspaper poll that showed voters favorhis policy on monetary stimulus.Income TaxTo raise revenue, Abe’s Liberal Democratic Party proposesincreasing the top income tax rate to 45 percent from 40 and theinheritance tax to 55 percent from 50 percent. It also calls forencouraging the transfer of generational wealth by offeringreduced tax rates on gifts to children and grandchildren.Abe’s approval rating rose six percentage points to 68,according to the poll by telephone between Jan. 25-27. The primeminister has the chance to replace Governor Masaaki Shirakawa inApril and two deputies in March with policy makers who supportmonetary stimulus to revive growth.Abe’s administration has also sought a weaker yen to aidexport competitiveness. At the World Economic Forum’s annualmeeting in Davos, Switzerland, Japanese Economy Minister Akira Amari said Jan. 26 that thenew government is not activelytargeting a weaker currency, instead aiming at defeatingdeflation.Japan is “absolutely not deviating from globalstandards,” Amari told “I don’t comment on a foreign-exchangerate because it should be determined by the market. What we dois to implement policies.”International ConcernAmari spoke at the end of a week in which German andCanadian policy makers joined a worldwide chorus highlighting a 2/4
  3. 3. recent plunge in the yen as a worry. The currency has declinedto its lowest against the dollar since June 2010 as pushes foreasier monetary policy.That strategy has sparked criticism that Abe is trying toweaken the yen to stoke exports, breaching a pledge by Group of20 economies not to competitively devalue exchange rates forfear of sparking a so-called currency war.“The Abe administration attaches its highest priority toexiting from prolonged deflation partly accompanied by theappreciation of the yen, and revitalizing the economy,” Amarisaid.Some ‘Misunderstandings’“Many nations said they welcome and support Japan’s newmeasures,” he told reporters. “Misunderstandings held by asmall group of people have been cleared up.”Speaking on the same Davos panel, Bank of Canada GovernorMark Carney commended Japan’s focus on beating deflation.Carney, who will move to the Bank of England in July, said Amarihad been “very clear and the Bank of Japan is clear in terms ofthe policy focused on a domestic inflation target.”German Chancellor Angela Merkel said on Jan. 24 in Davosthat “I can’t say I’m completely free of worry when I look atJapan right now.” Canadian Finance Minister Jim Flaherty toldBloomberg Television’s Erik Schatzker three days ago that he’sspoken to Japan Finance Minister Taro Aso about exchange rates.To contact the reporters on this story:Toru Fujioka in Tokyo attfujioka1@bloomberg.net;Simon Kennedy in Davos, Switzerland atskennedy4@bloomberg.netTo contact the editor responsible for this story:Paul Panckhurst atppanckhurst@bloomberg.net 3/4
  4. 4. Source Article from http://www.bloomberg.com/news/2013-01-28/abe-predicts-bump-in-tax-revenue-as-japan-emerg es-from-recession.html Waddywood.com Abe Predicts Bump in Tax Revenue as Japan Emerges From Recession – Bloomberg 4/4Powered by TCPDF (www.tcpdf.org)

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