Japan ruling party split as lower house OK's sales tax hike

ByREUTERS
June 26, 2012 10:53




TOKYO - Japan's lower house approved a plan to double the sales tax on Tuesday to help curb the nation's snowballing debt following a breakthrough deal between the ruling bloc and the opposition.

But the compromise, which helped Prime Minister Yoshihiko Noda end months of policy gridlock, could split his Democratic Party after public broadcaster NHK reported that 57 of its lawmakers failed to back the bill.

If 54 or more of them leave the party, the Democrats will lose their majority in the more powerful lower house, raising the prospect of an early election well before the chamber's term ends in the summer of 2013.

The plan to double the tax to 10 percent by October 2015 was passed by 363 to 96 votes and should also clear the opposition-controlled upper house.

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