The Consumption Tax Rate in Japan Is Expected to Increase This October

But there are some exceptions.

Photo Pixabay


In Japan, the prices written on merchandise are already inclusive of the 8% consumption tax. Because of this, you may be unaware of the tax you’re paying with every purchase you make. However, it is still good to be informed about the Japanese government’s plan to increase the consumption tax rate to 10% by the start of October. The government of Japan is also planning to set rules and exceptions for this new implementation. Here is a basic guide for your reference.

Effective date

Current

1 October 2019

Category

Standard tax rate

Reduced tax rate

Total

8.0%

10.0%

8.0%

Created by editing the chart (National Tax Agency)


In October, a reduced tax rate system for consumption tax (rate of 8%) will be implemented simultaneously with the consumption tax rate increase (rate of 10%). This means that you can save your money cleverly little by little if you know how to manage them.


Reduced tax rates will be applied in these cases:


1. Food and drinks excluding alcoholic drinks and dining out.
2. Newspapers issued more than twice a week (those based on subscriptions).


Let us explain a bit more about the case using the chart below.


Source: National Tax Agency website


To simplify the chart, if you dine at a restaurant, you have to pay the standard tax rate of 10%. On the other hand, if you decide to order take out from the restaurant and eat at home, you are obliged to pay the reduced tax rate of 8%.


Please be reminded that other details of the rules are still undergoing continuous discussion, and might change in the future. To be updated with the latest information, please visit the National Tax Agency’s website.


You still have time to shop before October 1! Spend your money wisely.


 (10 April 2019)

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