Tokyo, Nov 18: Japanese Prime Minister Shinzo Abe dissolved the lower house of parliament on Tuesday -- just halfway through his mandate -- and announced that snap elections will be held two years ahead of schedule.
Abe made the announcement at a press conference where he explained that the move resulted from his decision to postpone a sales tax increase, that was approved by parliament in 2012 and scheduled to take effect in October 2015.
"The fiscal system is very important for the citizens and has a lot of impact on people's lives, so I want to submit this measure as well as my entire economic programME to ratification," Abe said.
This move had been widely expected after economic data released Monday indicated that Japan had entered into technical recession with its GDP having contracted by 1.6 percent during its third quarter.
Abe explained that the scheduled tax hike could pose a threat for the deflated economy and that was the reason why the scheduled sales tax hike from 8 to 10 percent has been postponed to April 2017.
He added that the decision was made after listening carefully to the opinions of over 40 experts on the possible impact of the new tax hike.
Abe explained that the scheduled tax hike could pose a threat
In 2012, the Japanese parliament approved an increase in the sales tax from 5 to 10 percent, to be implemented in two phases. The first phase took effect in April, while the second had been scheduled for October 2015.
Abe recalled that his Liberal Democratic party, which was in opposition when the measure was passed in parliament, voted in favour of the move on account of the need to reform the pension system and maintain fiscal discipline.
In this regard, he assured that his position had not changed and that even though the tax hike had been postponed due to current economic conditions, it did not mean that the measure would not be applied.
The prime minister, who is also backed by the New Komeito party, promised to resign if he did not get at least half the total number of seats in the elections that are likely to be held in December this year.
In the December 2012 polls, Abe's party managed to obtain 294 of the 480 seats in the lower house of the Japanese parliament.