TOKYO : The International Monetary Fund urged Japan on Friday to scale back emergency pandemic support, and consider raising taxes on property and capital income once the economy's recovery from the coronavirus pandemic-induced doldrums is firmly in place.
"Looking ahead, given the large uncertainty surrounding the pandemic, fiscal policy should be nimble and flexible, adjusting the scale and the composition of support in response to epidemiological and economic developments," the IMF said in its Article 4 policy proposal to Japan. Once the recovery is firmly in place, Japan must resume efforts to rein in its huge debt such as by cutting ballooning medical costs for a rapidly ageing population, it said.
"Japan's tax revenues in percent of GDP are low relative to G7 countries, pointing to room for increased revenue mobilization," it said.
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