Thursday, March 20, 2014

Consumption Tax in Japan

In April, sales tax in Japan goes from 5% to 8%. There may be an additional 2% added next year. The last time sales tax was raised in Japan was 1997 (from 3% to 5%), the year of the Asian currency crisis which coincided with Japan going into recession. This is a very complicated situation and I don't pretend to know what any of it is all about. The additional revenue raised by the higher sales tax is supposed to ease the debt burden. Will it make people buy less because they have to pay more?

Most of the time, I don't think about or notice the sales tax here. The tax is usually included in the price, not added at the register.  The prices you see are the prices you pay.  On the menu, the vegetable curry set is 690 yen and that's what I pay.  I like it this way.

We hadn’t been to the Big American Store in 6 or 8 weeks, so we decided to stock up before the tax increase. I expect many people are buying things now before the tax rate goes up. We didn't have any plans to buy anything big, but if we did, we'd probably try to buy it before the rate went up.

 Here are some of the things we bought at the Big American Store. Maybe we saved a few yennies.

 

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