Japan Govt to Raise Consumption Tax to 10 Pct on Tuesday
Newsfrom JapanPolitics Lifestyle
Tokyo, Sept. 29 (Jiji Press)--The Japanese government will raise its consumption tax rate from 8 pct to 10 pct on Tuesday to secure a source of funding for ballooning social security costs and promote fiscal reform, marking the third increase since the levy was introduced in 1989 and the first hike since April 2014.
The increase to 10 pct was initially scheduled for October 2015, but Prime Minister Shinzo Abe postponed the hike twice due to concerns about the impact on the Japanese economy.
The government has prepared a series of measures to soften the blow to consumers, including the introduction of a reduced tax rate of 8 pct for certain goods, and of a point program for cashless payments.
These measures are expected to help limit the amount of increase in household costs caused by the tax hike to some 2 trillion yen a year, much smaller than the rise of about 8 trillion yen at the time of the April 2014 tax increase from 5 pct to 8 pct, an estimate by the Daiwa Institute of Research shows.
The point program, to be introduced on Tuesday, allows consumers to receive points worth up to 5 pct of purchase amounts if they make purchases at shops run by small and midsize operators and make cashless payments using credit cards or electronic money. But the program expires at the end of June next year.
[Copyright The Jiji Press, Ltd.]