Fukuda says no immediate decision in sight on sales tax

TOKYO, June 24 Kyodo - Prime Minister Yasuo Fukuda on Monday expressed reservations about deciding anytime soon whether to raise the consumption tax rate from the current 5 percent, saying the issue should be considered while gauging the outcome of the government's efforts to cut wasteful spending and monitoring economic trends.

The prime minister also stopped short of saying whether he would reshuffle his
Cabinet after hosting the Group of Eight summit in July, noting only that when
the time comes he would ''make a comprehensive evaluation'' of various policies
he is currently working on.

Referring to his remarks in a recent interview with news agencies in which he
said now is a ''crucial time'' to make a decision on the consumption tax,
Fukuda said, ''I have been thinking about the issue from a long-term
perspective, like two or three years.''

''I'll give it comprehensive consideration, but this step will be a little way
ahead,'' the prime minister told a press conference held following the
adjournment of the ordinary Diet session on Saturday.

In the interview last Tuesday with news agencies from G-8 member countries,
Fukuda indicated that an early hike in the consumption tax may be unavoidable
to finance rising social security costs.

During the press conference, he also expressed eagerness to keep in close
contact with the United States in dealing with North Korea ahead of a possible
U.S. removal of North Korea from its list of state sponsors of terrorism.

''The United States fully understands Japan's stance on the issue of (North
Korea's) abductions of Japanese nationals and has supported us in various
ways...Now that stalled Japan-North Korea ties are starting to show signs of
progress...I think Japan and the United States should further step up
cooperation,'' Fukuda said.

North Korea agreed with Japan in a bilateral meeting earlier this month to
reinvestigate the abductions and expressed readiness to cooperate with Japan in
handing over Japanese hijackers who have remained in North Korea since 1970. In
response to such moves, the Japanese government said it will ease some of the
sanctions it has imposed on Pyongyang.

Japan has called for the United States not to remove North Korea from its
blacklist until progress is made on the abduction issue.==Kyodo