October 4, 2018 / 5:54 AM / 6 months ago

IMF's Lagarde says Japan should raise sales tax as planned: MOF official

FILE PHOTO: A shopper is seen between price boards outside a discount clothing retail store at a shopping district in Tokyo, Japan, April 28, 2015 file photo. REUTERS/Yuya Shino/Files

TOKYO (Reuters) - International Monetary Fund Managing Director Christine Lagarde called on Japan to proceed with a sales tax hike to 10 percent as planned next year, calling it a vital step for fiscal reform, a Japanese Ministry of Finance official told reporters.

Lagarde made the remark during a meeting with Finance Minister Taro Aso on Thursday. She was in Japan for meetings with Aso and other Japanese policymakers for the IMF’s “Article 4” annual consultations on economic policy.

Lagarde was also quoted as saying that attention should be paid to the tax hike’s expected impact on the economy, given that the last increase, to 8 percent in 2014, triggered a downturn.

Aso told Lagarde that Japan would proceed with the tax hike as planned in October 2019, the MOF official told reporters after the meeting.

Reporting by Tetsushi Kajimoto; Editing by Chris Gallagher

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