The government intends to mitigate the impact of the sales tax hike scheduled for April 2017 by lowering the tax rate on food and other daily necessities. However, the benefits even for low-income households would be small. What’s more, spending on durable goods is more sensitive than spending on non-durables to changes in the consumption tax. The upshot is that the economy would still be likely to slow sharply once the tax was raised.
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