TOKYO, Aug 10 (Reuters) – The Japanese government’s
contentious plan to double the sales tax cleared the final vote
in parliament’s upper house after Prime Minister Yoshihiko Noda
promised to bring forward an election likely to end his
Democrats’ three-year rule.
The passage of the plan in the opposition-controlled upper
house is the result of a rare deal with two main opposition
parties and a breakthrough for Japan, long trapped in a cycle of
revolving-door governments and policy paralysis.
The plan to lift the sales tax to 10 percent by 2015 has
been billed as a test of Japan’s ability and resolve to tackle
its snowballing debt, which already tops two years’ worth of its
economic output, a record among industrialised nations.
It is a victory for Noda, although a bittersweet one as the
unpopular tax plan deepened a rift among the fractious
Democrats, causing some 50 lawmakers to quit, and surveys show
the party will suffer heavy losses at the polls.
