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The ruling Liberal Democratic Party and its coalition Komeito Paty are locked in a debate over applying a reduced sales tax rate for fresh foods when the tax rate rises to 10% in April 2017. Komeito w

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No tax on food items but then....food is the only item selling well in Japan...so LDP will go ahead with govt desired tax.

4 ( +6 / -2 )

I saw a story on NHK about this the other night. The definition of fresh food is really complicated. Neither shoppers nor retailers seemed to be able to understand it. My view is to keep it simple -- apply the reduced rate to any and all food and drink items that go into your mouth, whether it is fresh, processed, pre-packaged or whatever.

4 ( +6 / -2 )

Tax unhealthy food: the stuff that's a burden on the health system, and increase tobacco and alcohol taxes.

1 ( +4 / -3 )

My view is that they shouldn't raise the sales tax whatsoever.

1 ( +4 / -3 )

Translation: "Because we don't understand how the economic and monetary system actually work, our solution to the big, scary number problem is to have another self-inflicted recession and permanent loss of economic activity in Japan, like we have done three times before. But we are hoping for different results this time. However, we are also working hard to ensure we find the FAIREST way to inflict this act of economic sabotage."....Clowns!

1 ( +4 / -3 )

I agree with SenseNotSoCommon. Anything that is not in the snack isle, junk food/drink isle, freeze-dried food (cup noodles, et al) isle, or alcohol isle should be either tax-free or at a reduce tax rate.

The thing that absolutely makes no sense is that the LDP believes this tax scheme is absolutely necessary to reduce the public debt levels and bring health back to the economy, but we all know from personal experience that the last tax hike to 8% all but gut-punched the economy, effectively erasing any gains made in hiring or wages over the previous three years after the Lehman Shock.

Simple Law of Economics: You can't tax the crap out of consumers and then count on them to simultaneously spend more at the same time. It can't and won't happen.

That an absolute necessity like food is taxed in the first place is already questionable. But to saddle hopes for a ¥1.3 trillion tax windfall on the backs of a fundemental human need for nutrition is simply amoral.

8 ( +10 / -2 )

Food is an essential, along with health, education and the government policy of encouraging children. Follow the example of the UK (VAT = Value Added Tax) which has a much higher rate of taxation (20%), but leaves food (except snacks, alcoholic drinks and takeaways), children's clothes, physical education and sports activities, medicines, educational services, books and magazines, all exempt from VAT. Very easy to understand, apply and gather revenue from.

4 ( +6 / -2 )

This might be an unpopular view but there should be no exemptions on anything at the point of sale. Many countries have done this and it just opens the door to special interests.

In some countries, shelled peanuts are exempt from sales taxes since they are unprocessed while unshelled peanuts are taxable. You would assume that the same would apply to sunflower seeds but someone has carved out an exemption for unshelled sunflowers seeds to be considered an unprocessed food and therefore non-taxable. Just imagine what the special interests in Japan would ask for.

There are much better, simpler and fairer ways to deal with this. We can collect the tax from everyone at the point of sale and then just deposit ¥30,000 into the bank acounts of anyone who reports a taxable income of under ¥3 or 4 million (or whatever amount we choose). It would be equivalent to a retrospective 10% refund on the first ¥300,000 of food that a person spends and we could have higher amounts for people with children. It also stops the wealthy from benefiting from the refund. Doing it this way saves so much hassle for retailers and keeps out special interests.

-6 ( +1 / -7 )

Japan is one of the few, or is possibly the only industrialized country that applies sales tax to food. The problem with this is that food is already very expensive in Japan to begin with, and even untaxed, the average Japanese grocery bill is double that which Americans and Europeans pay. Somehow the government seems not to realize that the high cost of staple items is one of the factors pushing down the birthrate in Japan.

On the front page there is a story about how the governmnet is trying to reinvigorate growth by increasing the birthrate. The primary factors behind Japan's declining population are the high cost of food and basic necessities, and the high cost of housing in the metro areas, which happen to be where all of the jobs are. Abolishing the sales tax on staples, removing any tariffs on food items (TPP appears to have failed in this area), and decentralizing businesses and industries would go a long way to inprove things.

If the population continues to fall, the 1.3 trillion yen lost by reducing taxes on food will be only a drop in the bucket of future lost revenue.

7 ( +11 / -4 )

I don't care how much the tax is raised; it won't mean anything if the people we euphamistically call "civil servants" spend 105% of what is collected.

1 ( +3 / -2 )

Don't tax food and non alcoholic beverages. If you are going to raise the sales tax, then cut the income tax.

0 ( +2 / -2 )

Food is consumed both by the rich and the poor. You don't need to exclude food for those who can afford not to care. Keep the C efficiency high and give handouts to the poor.

-2 ( +0 / -2 )

I do not think food is double the cost here compared to America and Europe. That is totally ridiculous.

I spend more in America when I am there then here, and half of it goes to waste because of the huge volumes. I do not need to freeze pounds and pounds of stuff only to have it freezer burned.

-3 ( +1 / -4 )

I like the vague option. It has that elegant Abe touch where no one is really sure what counts as fresh and layers of complexity are added to yet another thing that should be simple.

1 ( +4 / -3 )

Aso himself talked about this selective tax cuts as "mendou-kusai!", so why doesn't the LDP just agree with the Komeito and apply it to all food and non-alcoholic beverages and make it 'simple' for him?

LFRAgain is absolutely right -- you cannot jack up taxes and demand that the public spend more at the same time, nor be surprised when the tax hike leads to disaster. The truth is the government has already spent that money and money for years and years to come WITHOUT additional spending, which we know is in the works, so they have already calculated the 1.3 billion extra yen into their coffers.

1 ( +4 / -3 )

My view is rigorous policing of shouhizei rorting.

When the latest increase hit (5% to 8%, not a whole 8% on current pricing), many businesses did the whole 8%. This was partly unintentional-cum-naive-cum-stupid-plus-simply-dishonest, because under the 5% regime prices were given inclusive of the 5% tax. Now that practice is gone.

The 5% to 8% increase actually was an increase of about 2.6% on whole prices, which actually is less scary than a sudden jump of 8%.

The new planned increase - from 8% to 10% - is also less scary than it looks. For instance, a bottle of tea costs 100 yen. 8% tax is 8 yen (ie. 108 yen); 10 % tax is 10 yen (ie 110 yen). Therefore, policing of businesses raising the cost of say tea now at 108 yen then plus 10 or 11 yen or so up to 118 or 119 yen selling price shouhizei inclusive - that is what I want.

Komeito's view is better than LDP anyway all round. Food is a necessity of which the cost always disproportionately hits lower income households. The same issue is being debated in Australia right now, with their Goods and Services Tax.

They say that more welfare-minded governments tend to increase taxes more. However, these VAT-style taxes sure are hoisted on people by conservative governments pretty often.

2 ( +3 / -1 )

Why can't there ever be any kind of efficiency? Why can't things EVAR just be streamlined? Every special intrest greedy greaseball has to get their fat fingers into the pie and the bickering and infantile back and forth begins.....

It's like an inept symphony of chaos playing all the time....

2 ( +2 / -0 )

It's got to be all or nothing. Best way would be for all food and non-alcoholic drinks to be given a zero rating for tax. While they are about it, they should end the tax break by which small retailers below a certain annual revenue are not obliged to collect and pay on the consumption tax. To relieve any hardship resulting from either of these, there should be a scheme for helping out lower-income people in a way that does not constitute a disincentive to work.

0 ( +0 / -0 )

What Sangetsu said. (too many "taxes" and markups already for food that are a waste).

-1 ( +0 / -1 )

There should be no tax on food. Period.

6 ( +6 / -0 )

"Komeito wants the reduced rate to apply to all food and nonalcoholic beverages"

What about Nodogoshi Nama?

"There should be no tax on food. Period."

Heck, they've been taxing food in Japan since 1989...

0 ( +0 / -0 )

In California most food isn't taxed. Hot prepared food, alcohol, tobacco are taxed - If I remember correctly.

It's quite simple. Most Japanese I've talked to seem to want no taxes on food. Give the people what they want.

I'm with Komeito on this one.

4 ( +4 / -0 )

Shaving the fat off government ministries, cutting bonuses to government workers (why do they get bonuses anyway?) Getting rid of do-less upper management and cutting "defense" spending. There are TONS of ways to save money WITHOUT raising taxes at all.

If they are going to raise taxes, raise them on NON-ESSENTIAL items. Tobacco is still cheap compared to many other countries. Alcohol, pachinko, fast food "restaurants" and a heavy tax on speculation (buying and selling stocks and shares) and other money games.

Pipe dreams!

Abe would be out the day after he suggested it!

2 ( +2 / -0 )

Could the Komeito + other parties together hold the line on a tax increase for food? (it should be 3% or even 0). Hoping... The LDP idea is even more complicated, if anyone is going to argue that aspect...

0 ( +0 / -0 )

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