Japan’s Sales Tax is now 8-10%

Prime Minister Abe lived up to his words to raise the sales tax, commonly termed consumption tax here, from 8% to 10% effective October 1. The sales tax issue had been a pain in his neck since his opposition predecessor Noda dumped the issue on him forwarding a year ahead the sensitive question of when to raise the rate.

The sales tax is now raised from 8-10 by 2% but is “dual” in rate and practice. The rate of 10% applies to general commodities and 8% to daily expendables. It means some daily necessities, such as vegetables, meat, and fish, stay the same at 8%. Ready-to-eat foods, such as a tray of rolled Sushi or a bag of sandwich, are priced as before if taken home but not if consumed within the store, that is an extra 2% taxed atop if you are hungry enough eat them inside the store.

Society is fast aging in Japan. A gigantic flow of aged population called “Dankai” is about to turn benefactors of the state pension calling desperately for national income by way of taxes. A Japanese friend of mine, a photographer, with his family in Canada, finds the Canadian version of sales tax, 13%, reasonable as it provides education free. I know for a fact that Norway provides education and medicare free.

Japan is now harder to live than in the United States where the sales tax rates vary from state to state. New York and Hawaii are typical at 4%, California the highest at 7.25% and none in Alaska, Delaware Montana, etc. In some states, the rates vary by season and even by the time of purchase. The duality in Japan is then nothing to talk about.

On the eve of the D-day, local shops and stores were flooded with housewives making the last-minute purchases of daily essentials while auto dealers with beaming smiles attending customers taking advantage of the occasion to switch over to a new model.

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