Japan may again postpone a decision on raising taxes to help cover rising defense spending, a senior ruling coalition official has said, raising more questions about how Tokyo intends to pay for a historic expansion of its military capabilities.
“It would be wonderful if we could make a decision this year, but if we can’t it doesn’t mean that we will stop increasing defense spending and boosting our defense capabilities,” Mitsunari Okamoto, the policy chief of Komeito, the coalition partner of Prime Minister Shigeru Ishiba’s Liberal Democratic Party, said in an interview.
As part of a five-year defense buildup launched in 2022 that’s projected to cost ¥43 trillion ($280 billion), the government has said it will raise personal income, corporate and tobacco taxes to cover the added costs. The increase in outlays would push defense spending to 2% of gross domestic product from just over 1% previously.