Japan Raises Sales Tax
The Japanese government finally went ahead with its plans to increase the standard sales tax rate. The Japanese authorities have been trailing the move for years now, with the potential last minute danger to the introduction of the measure, or the potential last minute savior of the Japanese economy (depending on your perspective) being the likely chilling effect of a sales tax hike on consumer confidence, and with the knock-on effect that is expected to have on spending.
Given the relative weakness of the Japanese economy over the last few years, with its concerns over the impact of an aging population on government receipts, this is a valid worry. However, the increase has now entered into force (following two previous delays), so let the dice fall where they may, economically speaking.
However, in order to mitigate the impact of the rate rise on lower income groups, a reduced eight percent rate will apply to the supply of foods and drinks – with the exception of liquors and restaurant services – and to subscription newspapers issued twice or more a week.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look