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IMF urges graying Japan to raise consumption tax to 15%

Fund calls for inflation target flexibility as chief backs Tokyo's stimulus

As Japan's social security obligations grow, the IMF sees the need for further increases in the consumption tax.   © Reuters

TOKYO -- Japan needs to raise its consumption tax further to fund growing social security costs, the International Monetary Fund recommended Monday, as its chief endorsed stimulus steps the country is weighing amid the global economic slowdown.

The tax "would need to increase gradually" to 15% by 2030 and 20% by 2050, the IMF said in a report. It offered a more specific timeline than a 2018 report that called for a gradual increase to 15%.

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