Japan’s consumption tax raises from 5% to 8%

By | March 31, 2014

Any of you living in Japan or keeping tabs on life there surely have heard about the raise to their consumption tax, but for those of you who are more focused on Japanese entertainment (manga, anime,etc.) I thought I’d write about it briefly.

Beginning April 1st Japan has raised their consumption tax from 5% to 8%. There is no gradual transition, just a sudden jump. In October 2015 the tax will jump again 2% to 10%. The 5% consumption tax has been like that since 1997 when it was raised from 3%.

I’ll admit that I’m not an expert when it comes to economics, or government in general, so I can’t speak on whether these drastic tax jumps are really worth it. But I’m sure in the short term it’s quite harsh, especially those for less income who are pinching pennies already.

Fortunately many companies are taking advantage of this opportunity to do sales or give out coupon vouchers that can be used starting today. And before the tax raise some companies were trying to convince consumers to buy their products with phrases like “By now before the tax raise!”. In some ways it reminds me of the year-end holiday season where both consumers and producers are majorly effected by a periodic event.

Will this deter me from living in Japan? At the moment I don’t have immediate plans to live there, but when/if me and my family decide to, I don’t think it will be a major factor. After all, the economic ecosystem of  producers prices, consumers buying habits, and even salaries should naturally adjust given enough time. I can’t think that this will have a major effect on the economy in the long term, though admittedly there is some faith on my part in the Japanese government.

One other side effect which even applies even to those living out of Japan is there will probably be some effect on prices for import products such as manga and anime. But it’s likely the fanboys and fangirls will be deterred by a a 3% raise in prices.

Note: The process of raising the consumption tax is called 消費税増税(しょうひぜいぞうぜい). 消費 means “consumption” and can also be used as a verb (消費する).



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5 thoughts on “Japan’s consumption tax raises from 5% to 8%

  1. Leonard

    Hello Mr. Sweet’s reporter! It’s been quite a while! I was at Tokyo until the day before the tax rise, 3/31. On television I saw people moving in and out of shops with carts. I’m glad I timed the trip at the right time phew!

  2. JB

    It’s more of an annoyance for me – for example, I went to the 100 yen store and whereas two items would cost 210 yen, now it’s 216, so even more coins in my pockets 😛

    1. locksleyu Post author

      Thanks for the comment. Yeah, I can imagine that prices changing for things like that which have been constant for years can be quite an annoyance/surprise.


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