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From April, all price tags in Japan must reflect final cost with sales tax included

46 Comments
By Ingrid Tsai, SoraNews24

If there’s one thing about living in Japan permanent residents, long-haulers, and short-term residents are familiar with, it’s the unique way some price tags are labeled in the country. Often phrased as 税込 (zeikomi), or “tax included,” many times the prices you see on shelves and tags are actually what you pay for at the cashier. Some retailers and stores, however, have opted out from displaying their prices in this fashion, except from April onward, they’ll be required to reflect sales tax within the displayed cost of a product or service.

Previously, retailers could get away with not listing the total cost of a product and simply adding one of the following three phrases to prices: “+ 税,” “税抜き,” and “本体価格,” which respectively translated to “plus tax,” “not including tax,” and “base price.” Under the new rule, such phrases which leave the final price vague, or essentially make the consumer pre-calculate the total cost before purchase, will be banned.

Restaurants will also be expected to reflect taxes in their listed prices. Furthermore, any establishment serving food must include a reminder on their menu of the different tax rates applied depending on whether a customer chooses to buy takeout or eat in-store. Respectively, a tax rate of 8 percent is applied for takeout whereas the tax rate is slightly higher for dine-in at 10 percent.

Another important aspect of this new rule is it bans retailers from also listing a product’s final prices in a way which is difficult for the customer to read.

Interestingly enough, store names are an expectation for this new rule. For example, stores titled as “100 yen stores” or events marketing themselves as “1,000 Yen Across the Board Sale” can remain as they are. They don’t have to add a formal tagline about tax inclusion in the cost or adjust their names to be something like “110 yen stores” instead. As long as the products being sold have their final prices including sales tax, whether on the shelf placards or printed on the tags, then all is well.

While some retailers have pushed back against the new rule by insisting consumers will buy less upon seeing seemingly higher prices, it’s still a little difficult to predict how this novel regulation will affect consumer trends in the near future. And if there’s one silver lining to pull, at least folks won’t be put in the embarrassing spot of not having enough cash at the register because they forgot to include sales tax when crunching the numbers in their head.

Source: Jiji Press, Impress Watch

Read more stories from SoraNews24.

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-- Supermarket throws away bench because of sales tax hike, angers many

-- Coca-Cola raises prices in Japan for the first time in 27 years

© SoraNews24

©2021 GPlusMedia Inc.

46 Comments
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I hope quotes and estimates are also required to do so.

9 ( +10 / -1 )

Finally

26 ( +26 / -0 )

While some retailers have pushed back against the new rule by insisting consumers will buy less upon seeing seemingly higher prices

In other words they are worried that consumers might react badly to seeing the actual price they have to pay, not a lower price.

21 ( +22 / -1 )

This is standard in most countries, I am surprised this has not been required before now. The customer needs to know the actual price they are going to pay.

17 ( +18 / -1 )

 some retailers have pushed back against the new rule by insisting consumers will buy less upon seeing seemingly higher prices

I read elsewhere that Uniqlo actually intends to keep their base price (non-taxed) for most items as the full tax price starting April 1, and just eat the price difference themself.

So a 1,990 yen shirt which had + 199 in tax (so 2,189 total) will instead be simply 1,990 (with tax). Their logic was that the psychological effect of staying under 2000 yen was strong enough to make up in volume sales the difference in loss profit.

It also means (the dreaded) deflation.

And probably an overall (further) loss in quality.

And a business model of mass producing cheap polyester stuff destined for already bloated landfills.

12 ( +14 / -2 )

Can't say this is standard in most countries, but in the few where I've seen it, it was very nice and consumer friendly.

Does the law apply to radio, print, and TV advertising too?

8 ( +8 / -0 )

Consumption tax is a penalty against consumption and has to be immediately abolished when businesses are having a hard time due to the pandemic that’s been going on for over a year now.

-2 ( +9 / -11 )

I seem to remember all prices including tax until the consumption tax was raised to 10%. I might be wrong, but it was after the tax increase where I started noticing pre-tax prices appearing everywhere.

8 ( +8 / -0 )

This used to be the way it was in Japan before the consumption tax was raised from 3%, if I remember correctly. I liked that system, as there was no ambiguity over the price. But then when it went to 5%, and they knew it was going to keep rising, stores stopped adding the tax. There is one supermarket here that has deceptive pricing. They have in big green numbers the before tax price, and in smaller red numbers the actual price. My elderly mother-in-law often gets confused by these.

9 ( +9 / -0 )

I noticed Seiyu recently changed all of their price tags. It definitely was a case of sticker shock on some items even though the final price should be the same. But I did notice some items that I regularly buy actually go up in price. It is a convenient time to slip through price increases.

7 ( +8 / -1 )

Price hike on the way!

7 ( +9 / -2 )

At last.

8 ( +9 / -1 )

It was always like this before the initial tax hike to 8%. The rationale to keep prices without tax added was that there would be another tax hike to 10%.

glad they are finally bringing this system back.

4 ( +4 / -0 )

I once have a lawyer charge me sales tax for his services, shocked the hell out of me. Sales tax is just another way to make an extra 5, 8. or 10% on top of profit and should be banned, sellers should not even mention it, it is between them and the tax office and consumers should NOT even be bothered and tricked with it.

3 ( +5 / -2 )

Finally!

This was one of the most ridiculous things I found in Japan.

Why always the need to complicate simple things?

When anyone looks at a price, the goal is to know how much will it cost to my wallet, who cares about the price “Without taxes”?!

I got used to it, but was quite frustrating specially the first times I came to Japan, which was for leisure purposes.

5 ( +6 / -1 )

This is standard in most countries, I am surprised this has not been required before now. 

I wouldn't most countries. Perhaps EU countries but most places I have traveled add tax in at the register.

And this law passed 2 years ago but companies were given 2 years to transition. Why it would take two years is something I don't understand.

3 ( +3 / -0 )

It's already mostly that way. One of the first things that I liked about Japan (after the food and omotenashi, of course) was how the prices were almost always listed with tax included. It is both annoying and surprising when I find a minority exception to that practice. (Uniqlo, for instance.) I'm glad to see it will always be so, now.

In the US, that is never the case. It's especially rough in restaurants, where you need to calculate the tax and tip in your head to figure the cost of the meal. Here, whatever it says on the menu is the cost of the meal. (I've never found a restaurant here that didn't include tax in the price.)

1 ( +2 / -1 )

I seem to remember all prices including tax until the consumption tax was raised to 10%. I might be wrong, but it was after the tax increase where I started noticing pre-tax prices appearing everywhere.

Actually you are almost correct. This nonsense started to happen when the sales tax was increased from 5% to 8%. In fact when I arrived in Japan in 2002, the prices were never displayed with the tax included. It was the government of Koizumi who passed a law in 2003 or 2004 that forced all shops to include the sales fax. This was really a relieve because nobody had to worry again about this nonsense no sales tax included thing. And then came the increase to 8% where suddenly prices without the sales tax came back or with the double labels BS with the full price written in smaller letters. This was done and allowed by the government in a total bizarre way in order to make appear the sales tax increase less painful than it was to the consumer. It was so bizarre.

5 ( +5 / -0 )

It's a way of hiding the thievery by the government. If people clearly see the amount of tax for each purchase, then they comprehend how the recent tax increases from 5% to 8% and most recently to 10% have robbed their purses.

3 ( +5 / -2 )

Yes, I was wrong and that the obligation to display tax-added prices was removed in October 2013.

It nearly got me the other day when I got my son to queue for some takoyaki and had to work out how much cash to give him. I worked it out as 10% but it was probably 8% for takeout. The pre tax prices in big numbers on the stand added up to 990 yen, so it was tempting to walk away with him holding a 1000 yen note that wouldn't have covered the bill.

I know this from playing the game Rummikub, but my daughter was seven before she could add up to thirty in her head. Multiplication to find tax prices will be older still.

0 ( +1 / -1 )

That's a good sign.

I got "screwed" once at a gas station because their illuminated street sign had a price much lower than anyone else in the area, then I found out they charged tax on top of it.

That was the last time I went there.

3 ( +4 / -1 )

I hate what some supermarkets and electronic stores do which is put up in bright red the price,but in smaller black brackets the REAL price.

4 ( +4 / -0 )

Lazy sheep will be happy: "Finally I don't have to do math in my head". On the other hand you don't actually see how much the product costs BEFORE you are forced to feed the government leeches through your taxes... This changed a bit your perspective, huh?

-8 ( +1 / -9 )

I wonder if they can continue to display the price without tax alongside it

That might be confusing though

2 ( +2 / -0 )

On the other hand you don't actually see how much the product costs BEFORE you are forced to feed the government leeches 

But then do the math instead of calling others lazy cheep....

4 ( +6 / -2 )

Long anticipated and welcome move. Even if it will initially mean a small and temporary decline in consumer spending because of the perception things are more expensive. Probably a 1 or 2 % decline in revenue for 2 to 4 weeks

-1 ( +0 / -1 )

The reform is reasonable while I also hope that details (price and VAT amounts/percentage) will appear in receipt.

0 ( +0 / -0 )

This will be an excellent excuse to raise the prices.

Welcome to the 20th century. Oh wait.. In most civilised countries, final price must be written, or at least it has to be the most visible number, where the price without tax is required to be smaller.

2 ( +2 / -0 )

The sneakiest scam of all is when stores set prices that look like post-tax prices (10800 yen, 2160 yen, etc.) and then add tax on top of that!

We even had a vendor (who is another division of our parent company, so we cannot choose not to do business with them) change the pre-tax price of some of their services from (round number plus 8%) to (round number plus 10%).

When we called them out on it they insisted that the word 税抜 was clearly indicated, the price hike was something they had every right to do, and the fact that the numbers were what they were was just a coincidence.

0 ( +0 / -0 )

Last time I went to NYC, they did the same thing - show prices without tax.

2 ( +2 / -0 )

To compensate all the suffering caused by this price trick they had for years, the new law should force sellers to display their prices 10% higher than they actually going to charge.

-1 ( +1 / -2 )

divindaToday  07:13 am JST

I read elsewhere that Uniqlo actually intends to keep their base price (non-taxed) for most items as the full tax price starting April 1, and just eat the price difference themself..... Their logic was that the psychological effect of staying under 2000 yen was strong enough to make up in volume sales the difference in loss profit.

This logic makes no sense. By showing tax-excluded prices on the item they are merely "delaying sticker shock" until the checkout. If they are saying that people are used to that, then fine. But people go to Uniqlo because it's considered cheap. At under 2000 yen an item will only attract a under 200 yen tax. This is not a make-or-break situation psychologically for the majority of buyers, and their marketing staff saying otherwise is shortsighted at best. It sounds more like Uniqlo trying to flex its muscles to maintain the status quo.

Also, many items at Uniqlo are over the 2,000 yen mark so that doesn't hold up either. Yes, that 2000 yen price point is their "bread and butter" so to speak, but to make an expensive marketing decision based on people's unwillingness to accept tax-in prices at the clothing rack, instead of the checkout, is simply wrong.

I hope they lose money over this in the long run and then reprimand their marketing staff.

-2 ( +0 / -2 )

ebisenToday  09:43 am JST

Lazy sheep will be happy: "Finally I don't have to do math in my head". On the other hand you don't actually see how much the product costs BEFORE you are forced to feed the government leeches through your taxes... This changed a bit your perspective, huh?

Nope. You either factor in 10% before you pick up the item or you do it later at the checkout. Either/or it makes no difference when this happens while STILL INSIDE THE STORE.

1 ( +2 / -1 )

Very good, because it is sometimes confusing or almost invisible printed on the price tags or restaurant menus and you really get shocked afterwards at the cashier’s registry, making a bargain suddenly a too expensive buy.

5 ( +5 / -0 )

long, long, and again long overdue.

5 ( +5 / -0 )

Thank god!

It used to be this way until the sales tax went up to 8%, then every shop started doing their own thing, and some shops included tax and others didn't, or they'd show both, but most would put the 'with tax' number in very small text and the 'without tax' number in big text.

It became a confusing mess.

I read elsewhere that Uniqlo actually intends to keep their base price (non-taxed) for most items as the full tax price starting April 1, and just eat the price difference themself.

This is how a lot of business works. It's why products are priced at $199 and 199gbp and 199 euros despite the company making different amounts of profit on each. It's also why prices didn't (immediately) increase last time the sales tax increased in the UK, for example.

I'm not sure quite why, but it seems much more common for Japanese shops to pass on cost increases directly and immediately to customers. There will be a typhoon in Hokkaido and the next day the price of carrots will have gone up dramatically. Most countries I've lived in the stores will maintain the standard price and absorb the change in their profits... in the short term at least.

Then again, Tokyo supermarkets have the weird strategy of changing their prices on almost every product almost every single day, so that no one has any idea what the actual price should be. (This is a deliberate strategy to confuse consumers btw), whereas overseas stores seem to maintain a fixed price for most products.

2 ( +2 / -0 )

This will simply make it easier to hide both price increases and tax increases.

-2 ( +0 / -2 )

How many times have they switched this back and forth again? At least three in my time here, the most recent being from having to include tax in the cost shown to not having to again when they increased sales tax to 10%.

1 ( +2 / -1 )

I think they are just doing it to help their buddies in the printing business. Probably had signs printed to show, during explanation, what they are saying in Kanji.

-1 ( +1 / -2 )

In the end, we still have to pay. Discounted goods make inclusive labeling more complicated.

-3 ( +0 / -3 )

A headache for businesses to change all the labels, but my headache of converting will be gone!

2 ( +2 / -0 )

This is the sensible way to label pricing. When I was in America I want to buy an item and see on the tag the price is $19.99 so I take the item to the register and give them $20 to pay for it only to be told it is $22.45 or whatever. Im like, the price clearly says $19.99 and they say yeah but you have to pay tax on top. I could not believe such a stupid system could exist but that's how they do it. They do a lot wrong over there, wrong side of the road, no using metric system and dont put the correct price on their items.

Japan has made a good sensible move that helps tourists and citizens alike. Well done Japan.

2 ( +2 / -0 )

I hope quotes and estimates are also required to do so.

Just agree to the price and when they try to stick another 10% on after the job is done, you tell them to take a hike because they told you X%, not X% + 10%.

4 ( +4 / -0 )

Would be nice if the country I'm currently living in had a tax rate set at only 10%, so much whining going on for such a low rate. I expect the tax rate to go up 2.5%, maybe even 5% in the near future to cover the whole COVID expense fallout here.

0 ( +0 / -0 )

They do a lot wrong over there, wrong side of the road, no using metric system and dont put the correct price on their items.

Two out of three, anyway. They drive on the right side (right as in position and as in "correct"). The vast majority of countries have right-hand traffic. Only a handful of developed countries have left-hand traffic, plus a bunch of tiny former British colonies.

I never understood why the US occupation didn't make the switch to right-hand traffic in Japan immediately after the war, as there were hardly any domestic vehicles here at that time, and almost zero infrastructure. It would have been so easy. Oh well.

-2 ( +0 / -2 )

garypen, you are quite right “developed countries have left hand traffic” shame about the colonials across the pond but never mind they will grow up one day, give them a thousand years or so ;)

0 ( +0 / -0 )

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