Japan needs $20 billion spending package if sales tax raised - Amari

Reuters

TOKYO (Reuters) - The Japanese government will need to craft a spending package of more than 2 trillion yen (12.92 billion pounds) to cushion if the economic blow if it goes ahead with a planned increase in the national sales tax, Economy Minister Akira Amari said on Monday.

"According to the Finance Ministry, the economic drag (of the tax increase) would be just under 2 trillion yen," Amari told reporters. "But (spending that amount) wouldn't be enough to return the economy to a rising trend."

Prime Minister Shinzo Abe has said the decision whether to begin a planned doubling of the sales tax with an increase in April will be a difficult balance between the need for economic growth to end 15 years of deflation and the need to begin tackling Japan's massive debt problem.

Abe will likely decide on the tax increase on October 1, the day of the Bank of Japan's closely watched "tankan" survey of business sentiment, Amari said.

(Reporting by Sumio Ito; Writing by William Mallard; Editing by Kevin Krolicki)

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