Japanese VAT Going Up?

[bill937ca]

A note for those planning a trip to Japan.  The Japanese government is planning to raise the consumption tax to 8% for a minimum of three years. Nothing is certain yet.  Purchases of hobby materials from online vendors are exempt from the Japanese VAT so this won't effect those just buying trains and supplies.

 

http://mdn.mainichi.jp/mdnnews/national/archive/news/2011/04/20/20110420p2g00m0dm009000c.html

 

Gov't mulls raising consumption tax to 8% for reconstruction

 

TOKYO (Kyodo) -- The government led by the Democratic Party of Japan is considering raising the current 5 percent consumption tax to 8 percent for about three years to raise money for reconstruction of the country's northeastern region devastated by the March 11 earthquake and ensuing tsunami, DPJ senior lawmakers said Tuesday.

 

If realized, tax revenues will increase about 22.5 trillion yen and the amount will cover much of the extra expenditures for reconstruction expected in the current fiscal year, the lawmakers said.

 

The government has estimated that the damage from the natural calamities that left around 28,000 people dead or missing could amount to 25 trillion yen.

 

After submitting the first extra budget of 4 trillion yen to the Diet this month, the government is planning to draw up two further budgets in fiscal 2011. The second and the third budgets are expected to entail a total spending of 20-30 trillion yen, they said.

 

Many DPJ lawmakers are in favor of raising the tax by 3 percentage points from the next fiscal year starting in April 2012.

 

But whether the government will actually manage to raise the politically sensitive tax remains very uncertain as there is strong opposition among both ruling and opposition lawmakers.

 

The Liberal Democratic Party on Tuesday already made it clear that the biggest opposition party will not back the idea.

 

"The disaster victims will end up having to pay the increased tax as well," LDP Secretary General Nobuteru Ishihara told reporters after holding talks with his DPJ counterpart Katsuya Okada.

 

Ishihara quoted Okada as saying that the DPJ has yet to finalize the plan so it wants to discuss how to raise enough funds for reconstruction with the opposition party from "a neutral standpoint."

 

Government officials say it is possible to allow the victims to receive refunds in the event that the tax is raised. But tax experts have pointed out that such special treatment will likely lead to complicated paperwork.

 

To avoid a possible negative impact on the economy, some lawmakers say income or corporate taxes should be raised, instead of hiking a tax that will apply to all individuals in the country.

 

Unlike the first budget, the government believes it cannot avoid issuing bonds to finance upcoming emergency expenditures.

 

Some DPJ lawmakers are exploring the possibility of raising the consumption tax for a certain period in the name of "a solidarity tax" to repay the bonds.

 

As part of efforts to rein in Japan's ballooning debt, however, the Finance Ministry is hoping to maintain the 3-point increase, even after the government redeems the bonds for reconstruction.

 

Senior officials at the ministry have said that the 8 percent consumption tax should be kept to cope with swelling social security costs.

 

The DPJ "has conducted various studies, including that," Chief Cabinet Secretary Yukio Edano said at a press conference, referring to the possibility of raising the consumption tax. But the top government spokesman also denied that any specific idea is being studied at the government level.

 

Also Tuesday, the Cabinet agreed on a set of measures to help ease tax burdens on people affected by the disaster. They included a step to free the victims from paying fixed-asset taxes on their homes and real estate during the current fiscal year through next March.

 

Prime Minister Naoto Kan is likely to submit relevant bills for Diet deliberations together with the first budget by the end of this month.

 

(Mainichi Japan) April 20, 2011

[Martijn Meerts]

I think it's a good idea, and would definitely not stop me from visiting Japan. However, like already mentioned in the article, I wouldn't be surprised if it stays at 8%..

 

Of course, having lived in Norway for a while, 8% tax seems like nothing at all :)

[Guest ___]

It would impact my next trip, especially with the yen trading around ¥82 --> $1. On my first trip the rate was ¥115 --> $1 add the VAT to 8% and the cost just gets to be too high to be affordable. You're talking a lot of money if one wants to do any shopping.

[keitaro]

lol come to australia and pay tax in the form of a rich mans  salary

[westfalen]

Yeah, our GST is 10% so 8% is a bargain and I'm sure it will stay, politicians rarely lower taxes no matter what they are for or which side of politics introduced them. That said, I'd be happy with it as long as the extra money raised actually did go toward reconstruction and helping those affected by the disaster, whether that can be assured is another thing. I think the day to day things a traveler needs to purchase would still be relatively cheap in comparison to most western countries.

 

"They included a step to free the victims from paying fixed-asset taxes on their homes and real estate during the current fiscal year through next March." This should go without saying if your home is now a pile of lumber or floating around a hundred miles out to sea.

[pepegalego]

keitaro

 

10% tax is high?

 

You are joking of course, here in the EU we have 18 - 20% on average!

 

Nice to know hobby stuff is exempt, phew!

[keitaro]

nah not really reffering to just GST

 

If you calculate the tax on evrything we don in aus it's almost 60% tax on everything you do.

 

Australia is right up there in top 5 for paying through our teeth in tax and now the govt wants to add more.

[westfalen]

nah not really reffering to just GST

 

If you calculate the tax on evrything we don in aus it's almost 60% tax on everything you do.

 

Australia is right up there in top 5 for paying through our teeth in tax and now the govt wants to add more.

True, it cost me over $70 to fill my Honda CRV with petrol yesterday, a good share of that would have gone straight to the government.

[keitaro]

my mitsu outlander costs the same.

 

not only that though theres almost a tax on everything in aus. It is getting really ridiculous.

 

to the point where i may be considering moving to japan to start a business an aussie one HAHA!

[Martijn Meerts]

The grass is always greener on the other side ;)

 

In Norway, I was paying around 40% income tax, on top of that, there was a 25% vat on most articles, and even more on alcoholic drinks and tobacco products. Considering housing in Norway (at least in Oslo) is very expensive, it's near impossible to get by if you live by yourself.

 

In the Netherlands I'm probably around 30-35% income tax, and I get a good amount of travel expense compensation, on which I don't pay taxes. Of course, there's also a 19% vat on many items here, and I believe they want to increase that. Once you get above a certain income level, you actually start paying 50-60% income tax here, plus the 19% vat on top of that.

[disturbman]

Yes, that sounds like Europe. 

[keitaro]

Capitalism I was bound to bite everyone on the arse eventually. Oh well still better than comunism

 

In syd you need at least 900 a week to live comfortably if your single.

 

If your a family paying rent at least 1400 a week and at least 1900 if you have a home loan.

 

And of course prices at the bowser going up and many other products soon to do so will rise with this carbon crap thats not going to make a bit of difference to the environment.

 

 

Mean while 3% rise is nothing. Plus this defiantly won't go down because back in December before the next budget announcement they were saying then they were considering a 4% rise. This is just a goo excuse to do so. Same as juliar and the budget cuts and carbon tax with qld

[disturbman]

Capitalism I was bound to bite everyone on the arse eventually. Oh well still better than comunism.

 

Not that I'm a commie (far from it) but I don't think anyone of us can say anything about Communism. From what I've heard and see a good deal of the East Germans would have gladly stay under their "communist" regime. But this is a whole other discussion.

 

In Sydney you need at least 900 a week to live comfortably if your single. If your a family paying rent at least 1400 a week and at least 1900 if you have a home loan.

 

This numbers don't mean anything for us who don't know what is the average income per week. You always need to put things in context if you want people to understand what you are speaking about. Also, plain numbers without their "metrics" like € or $ or m or kg don't mean anything at all. As far as I'm concerned you cou could be speaking about 900 liters or cars or whatever, hopefully I know that you meant Australian $.

 

And of course prices at the bowser going up and many other products soon to do so will rise with this carbon crap thats not going to make a bit of difference to the environment.

 

That's your opinion. You shouldn't throw such affirmations that carelessly in a forum. It can lead to flamewars.

 

Mean while 3% rise is nothing. Plus this defiantly won't go down because back in December before the next budget announcement they were saying then they were considering a 4% rise. This is just a goo excuse to do so. Same as juliar and the budget cuts and carbon tax with qld

 

Like before with the numbers. I (and I'm sure I'm not the only one) don't have a clue about what you are speaking. I'm not Australian and by not giving me any context you are actually banning me from your conversation. At the end, and I'm sorry to tell you that, all what you wrote is for me giberish. I don't even understand what is "qld".

 

We are on an international forum and I would greatly appreciated if you could make an effort to make yourself understandable to everyone. This is not a critique, it's just that if you are here to have conversations with people you should assume that we know nil about Australian politics and life in Australia. Since you have lived in Japan and have been confronted (I assume) to cultural and lingual exclusion I would think you will understand that. It's not because we share (to a limited extent) a language that we also have a common culture, knowledge and background.

 

If I'm not very big on easy statements about politics (and even political discussions in general on forums), I still would like to be able to understand what you are speaking about. For the moment, it's like you are speaking chinese (or any other language that I didn't learned).

 

Also. Don't feel obligated to explain everything right now. This is just something I would like you to keep in mind for future posts.

 

Edit: Just wanted to add a mood statement :) :) :)

[Guest ___]

I think everything is proportionate. People say Tokyo is expensive, but the cost of doing biz in Tokyo when the exchange rate was stable was no more expensive than being in New York. Now with the rates out of whack, it hurts everyone. It hurts Americans cause everything is butt high, it hurts the Japanese cause they can't sell to the US. (Sorry, I can't speak for the EU or other countries as I just haven't memorized my ForEX rates this week.)  But at leasy Japan is not going to raise the Goji tax, cause man, you know how cheese Godzilla gets when he doesn't have an extra ¥50 yen in his coin purse for lunch at the Hello Kitty factory  :laugh: :laugh: :laugh: