Japanese Prime Minister Postpones Tax Raise

August 2, 2016

Unlocking Word Meanings

Read the following words/expressions found in today’s article. 

1. accelerate / ækˈsɛl əˌreɪt / (v.) – to speed something up
Example: The government tried to accelerate economic growth by improving the country’s tourism.

2. counter / ˈkaʊn tər / (v.) – to go against something
Example: The company countered income losses by reducing its staff.

3. deter / dɪˈtɜr / (v.) – to make someone avoid doing something
Example: The controversies surrounding the brand deterred people from buying their products.

4. stunt / stʌnt / (v.) – to stop or slow down growth
Example: The government crisis stunted economic growth.

5. find favor with (someone) / faɪnd ˈfeɪ vər wɪð / (idiom) – to get praise from someone
Example: The new policy that lowers school fees has found favor with the people.


Read the text below.
Japanese Prime Minister Shinzo Abe has postponed plans to increase sales tax by two years.

Sales tax is the tax imposed by the government on consumers. Japan’s sales tax is currently at 8%, and was originally set to be raised to 10% in April 2017. Prime Minister Abe announced on June 1, however, that he is delaying the tax increase to 2019. He said that the decision is aimed at accelerating his “Abenomics policy,” which refers to the economic policies that were designed to counter Japan’s long-standing deflation.

For the last two decades, Japan has been battling with deflation, or the general decrease in the prices of goods and services. While, at first, low prices serve consumers well, it can lead to generally lower revenues for companies, which can weaken the economy in the long run.

The Japanese government has been increasing sales tax to achieve its goal of increasing the government budget by 2020. This year’s delay is the second time that the government has postponed the tax raise. The 2% increase was originally due on October 2015, but Prime Minister Abe announced its postponement in late 2014.

While meant to raise the government budget, tax increase comes with the danger of further deterring consumers from spending, which may further stunt the Japanese economy’s growth. Sales tax was last increased in 2014 from 5% to the current 8%. The previous tax increase caused the economy to decline briefly, as consumers were discouraged from spending by higher prices.

Meanwhile, the recent decision has found favor with the majority, as a poll by Mainichi Shimbun revealed that three in four people approve of postponing the tax raise.

Viewpoint Discussion

Enjoy a discussion with your tutor.  

Discussion A

·         What are the negative effects of an increase in tax?
·         What are the positive effects of a high government budget?

Discussion B

·         What are the reasons why people stop spending money?
·         What are the possible ways to encourage people to spend more?

August 2, 2016