Japan Raises Consumption Tax to 10 Pct amid Concerns
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Tokyo, Oct. 1 (Jiji Press)--Japan raised the consumption tax to 10 pct from 8 pct Tuesday amid mounting concerns about negative effects on the economy and possible confusion among consumers.
The tax shifted to a two-tier rate system aimed at mitigating the impact of the tax hike on consumers. The tax rate stays 8 pct for some items, mainly food and beverages excluding alcohol products, while the 10 pct rate applies to the remaining items.
The new system is likely to confuse consumers because it is sometimes difficult to tell which rate applies.
The government also launched measures to support consumption, including a point reward program for those making cashless payments.
Despite the measures, uncertainty remains for the economy. The tax hike was implemented just as exports were dropping amid the U.S.-China trade war, leaving private consumption the major driving force for growth.
[Copyright The Jiji Press, Ltd.]