Point Reward Program for Tax Hike Seen Fueling Price Wars in Japan

Economy Politics Lifestyle

Tokyo, Sept. 1 (Jiji Press)--A program to reward points to shoppers to ease the burden from the Oct. 1 consumption tax hike from 8 pct to 10 pct in Japan is expected to trigger fierce discount wars among retailers in the country.

The program, to be in place from October to June next year, before the start of the Tokyo Olympics in late July, is seen spurring consumption to a certain extent.

But there are also concerns and challenges about the system, with some warning of a possible pullback in demand after the end of the program. Benefits to consumers will likely be limited in areas with the relatively small number of shops participating in the program.

The program will reward 5 pct of the purchase amount to consumers from the state coffers in forms such as shopping points when they use cashless systems including electronic money and credit cards to pay for goods or services at small retail shops or restaurants.

The rate of the reward will be 2 pct for purchases at franchise shops of major convenience store and fast food chains.

[Copyright The Jiji Press, Ltd.]

Jiji Press