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| Japan delays sales tax increase amid growing opposition | Japan delays sales tax increase amid growing opposition |
| (40 minutes later) | |
| Japan's ruling party, the Democratic Party of Japan (DPJ), has agreed to postpone a sales tax increase amid growing opposition against the move. | Japan's ruling party, the Democratic Party of Japan (DPJ), has agreed to postpone a sales tax increase amid growing opposition against the move. |
| A DPJ panel has agreed to delay raising the tax to 8% until April 2014, with a further increase due in October 2015. | A DPJ panel has agreed to delay raising the tax to 8% until April 2014, with a further increase due in October 2015. |
| The 8% tax level was due to come into force by April 2013. | The 8% tax level was due to come into force by April 2013. |
| Prime Minister Yoshihiko Noda has been seeking to double the sales tax from current 5% to improve the country's finances, amid growing debt levels. | Prime Minister Yoshihiko Noda has been seeking to double the sales tax from current 5% to improve the country's finances, amid growing debt levels. |
| Japan, the world's third-largest economy, has the highest public debt to gdp ratio among the world's developed economies. | |
| Rebuilding economy | |
| The delay in tax increase comes just days after Japan unveiled a 90.3tn yen ($1.2tn; £742bn) draft budget plan for the financial year running from April 2012 to April 2013. | |
| Japan has been facing an increased pressure on its finances as it continues to rebuild its infrastructure and economy after the earthquake and tsunami in March. | |
| According to the Cabinet office, the twin disasters are estimated to cost it between $198bn (£127bn) and $309bn. | |
| Analysts said the delay in the tax increase was likely to put pressure on Japan's already-stretched finances. | |
| "We are now in a spending-oriented economy without a meaningful tax reform policy," Martin Schulz of Fujitsu Research Institute told the BBC. | |
| "The tax increase would have counterbalanced the budget that the government have drafted," he added. |