IMF urges Japan to scale back pandemic support, raise taxes in long run

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TOKYO, Jan 28 (Reuters) – 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.

While authorities must keep supporting households most hard hit by the COVID-19 crisis, they should continue scaling down pandemic-relief measures as the economy recovers, the IMF said.

“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 after a routine monitoring of the economy, known as its Article 4 process.