This week, I will write about the consumption tax rate that has been discussed for a long period of time since the Prime Minister Shinzo Abe took the seat of Japan Prime Minister.
Prime Minister Abe is eager to launch the plan of tax raising in October 2019 after the initial plan has been postponed for two times already.
Tokyo-Prime minister Abe is planning to increase Japan's consumption tax to 10% by October 2019 as a measurement to acquire more income to strengthen the benefit of FREE preschool for children. However, this policy will get some excemption which allow some goods to be maintained the tax level at 8% as the government is always concern for those who needs to buy vehicles or any life-long product such as houses before the real demand will be decreased.
The exemption items that will be maintained the tax rate at 8% is consumption goods except when people coming to have a meal in a restaurant while any beverages that contains alcohol will also face the 10% tax but many small-medium enterprise still able to give their clients for some benefit such as discount or cash-back program if their clients are willing to pay by credit cards or any form of payment except cash.
For the amount of tax that will be increased, some of those tax will be distributed to cover the expenses for children to reach the childhood education free since Japan's population is getting lower and lower every year.
Abe also stated that the tax will be distributed as a cost for restore and repair any houses or buildings that have been damaged by natural disasters such as earthquake or typhoon while the repair task can also create some job's opportunity as well.
The consumption tax of the Japan had been lifted up from 5% to 8% on 2014 while the policy of tax raising from 8% to 10% has been postponed for 2 times as the result from the economic recession in Japan but Abe said to reporters that he is "Aware of the situation and will carefully plan for this matter"
The announcement of this tax raising policy has been released through the special cabinet meeting to approve the budget of 8,300 million dollars alone to repair cities that have been damaged by massive earthquake and powerful typhoon recently. As for the exact date to apply the new rate of the taxation, the government will announce the exact date once everything is ready.
For any readers who is still confuse about the Japan's taxation, I will explain below:
1.Tax will be increased from 8% to 10% for clothes, camera, shoes, watches, toys or any goods that can not be consumed.
2.The tax rate of 8% still apply for foods, however, there are some rules that you need to know -If you want to buy those food and take it back home (or your hotel), tax will still counted only 8%
-If you go and dine-in at the restaurant, canteen in any companies or school including small snack house and convenience store, the rate will be counted as 10%
-For the case that you purchase those foods (or take away) from any places mentioned above, the tax will be applied only at 8%
3.The exact date to launch this policy is still not confirmed yet.
4.The tax refund for oversea tourist still applicable so any foreigners should not be worried too much!
Original source from nikkei
Cover photo from asia nikkei content picture from usnews
