politics

Abe says sales tax to go ahead as planned in Oct 2019

67 Comments
By Anthony Wallace

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Folks should have seen this coming. Abe is doing his damnedest to suck the life from the people in the name of fiscal health!

10 ( +13 / -3 )

Abe doesn’t have a clue!

11 ( +14 / -3 )

As others have mentioned, even though it is supposed to be a 2% increase in the consumption tax, I fear it will really be 10% on top of what we are paying now. Whenever the gov't raises the tax is an easy time for companies to raise prices without any kind of outrage from customers. And I won't hold my breath for those salary increases either.

17 ( +19 / -2 )

Here’s an idea. Stop spending money you don’t have on stuff you don’t need.

Eh... for example, billion dollar defense projects for threats that don’t exist.

22 ( +24 / -2 )

Gee, just in time for the 2020 Olympics and the huge influx of tourists

11 ( +13 / -2 )

Gee, just in time for the 2020 Olympics and the huge influx of tourists

This has been on the agenda since far before the Olympics were even thought about. The rise has been delayed twice. This time Abe couldn't give a crap as he is in effect a "lame-duck" PM and it's his followers who will have to face the fall out in the years to come.

As others have mentioned, even though it is supposed to be a 2% increase in the consumption tax, I fear it will really be 10% on top of what we are paying now. Whenever the gov't raises the tax is an easy time for companies to raise prices without any kind of outrage from customers. And I won't hold my breath for those salary increases either.

True, back when it went from 5% to 8% vending machine companies increased the cost of their products by more than 10% in many cases, (or for down here an even 10%) because their machines do not accept 1 yen coins. So in effect for the past few years they have been collecting an additional 2% overall, which has been pure profit for them.

Now they will jack the prices an additional 10 yen or more, to supposedly cover the additional 2% increase.

Do the math...more profits again!

And I won't hold my breath for those salary increases either.

Quite the reverse may indeed occur, companies will make the claims that due to the increase in costs associated with the rise in the consumption tax they will have to CUT wages to stay afloat!

12 ( +12 / -0 )

The point-of-sale tax will rise from eight percent to 10 percent from October next year as aging and heavily indebted Japan battles to finance snowballing social security bills -- especially medical fees.

They need to invest in medical research to develop drugs and other anti aging treatments that will keep older people healthier at much less cost. But the hysteria of the news coverage also needs to roll back. Anyone that didn't know better would think this tax was going into effect tomorrow instead of next year.

3 ( +3 / -0 )

Still, it got passed just in time

1 ( +3 / -2 )

Like last time, timing is important for any upcoming major purchases. I remember last time when a few months before the rise, the country went on a shopping spree, forcing prices to rise well above the extra they would have paid in consumption tax. When 8% went into effect and the slump began, prices dropped down below the pre-rise hike.

So, I'm looking to buy a new fridge sometime in the next year (my old one is giving signs of conking out). Do I buy now..or soon? Or do I chance it, wait another year and hope history repeats itself with another post-rise slump in prices that would negate the tax rise? Hmmm.

4 ( +4 / -0 )

Glad I already bought my house.

6 ( +6 / -0 )

The corporations got a tax CUT, and they're raking in record-high profits while refusing to give their workers substantial raises -- all of which is holding back the recovery. It's obvious the govt should rescind the corporate tax cut and lessen the burden on consumers, whose spending accounts for 60% of GDP.

11 ( +11 / -0 )

Lol and yet, the docile populace will roll over and take the abuse. Looking forward to the next increases. The solution to a country that's run out of options.

4 ( +5 / -1 )

"......  an expected rise in salaries .....".

Pay attention to the word "EXPECTED"!

"They" always expected and nothing happened, well, at least not to my knowledge and what my paycheck tells me. In addition I also got my doubts that all that money will be spend for what "they" say. It definitely will also support more parades (like the one Abe had) and a military build-up. Stop that wasteful spending once and for all! Enough is enough!

7 ( +7 / -0 )

Still not one word about the government reducing its exorbitant spending. Bet there is an other record budget on the way. And another round of handouts to profitless companies. While the rest of us grind on paying more tax. I shake my head.

9 ( +9 / -0 )

At this rate half the population will be living on the streets forced to collect and sell cans just to be able to buy a ¥500 bento!

3 ( +4 / -1 )

Still, it got passed just in time

What got passed? This increase has been "passed" years ago. Implementing it has been delayed due to poor economic conditions, which in effect have not really changed at all!

Abe put it off twice, if he puts it off again people on both sides of the aisle will call his judgement into question for proposing it in the first place, and also place him in jeopardy of losing support across the board.

-1 ( +0 / -1 )

I'll try to enjoy one last year where I can afford buying meat and vegetables.

an expected rise in salaries next year

Is that a thing ? No such discussion where I work.

3 ( +4 / -1 )

Abe should cut the budget instead. Why waste taxpayers money and increase their tax at the same time ? Obviously, Japanese people are not Abe's boss.

3 ( +4 / -1 )

This time, Prime Minister Shinzo Abe believes he can avoid a sharp decline in consumer spending by introducing measures to cushion the blow.

The government "will do its best to avoid a negative impact on the economy by taking every possible measure," Chief Cabinet Secretary Yoshihide Suga told reporters.

LDP always bloats about ' doing their best ' ....yet their best is always pathetically short. The only time thye truly do their best is when it comes to looking after themselves and their cronies.

Here is a novel idea to avoid negative impact on the economy....give everyone a tax cut in form of tax credits that have to be spent on purchases within a desgnated timeframe instead, stop wasting money vote buying pork subsidies, on missile snields and bridges that are not needed, cut the number of do nothing legislators which you promised but sneaked out of and tax luxuriesand tax dodging J companies. Then you wont have to worry about recession.

J- voters have a unique opportunity to give Abe,s LDP a kick in the ass come electiin time next summer ..thats their only chance of stopping the tax increase grab if they want. ...but TIJ..shooganai naa ....

7 ( +8 / -1 )

What if economy suffers as a consequence ? Will Abe resign ?

2 ( +3 / -1 )

Japan consumption tax is uncompromisingly harsh on the economy a blunt instrument irrespective of the means to pay. All encompassing...........

Quote …...

Domestic transactions: the transfer or rental/lease of assets or the provision of services as a business in Japan by an enterprise for consideration. Import transactions: foreign cargo retrieved from a bonded zone Financial transactions, capital transactions and certain transactions in the areas of medical care,

Only welfare and education are deemed non-taxable. Export transactions and export-like transactions such as international communications and international transport are exempt from consumption tax.

A complete overhaul, top to bottom reform of the tax and employment system, is long overdue, also a review of the 2019 budget. Painful yes, but there need to be a clear budget surplus, to pay down the debt and to restore confidence.

2 ( +3 / -1 )

Wow! Economics is so easy! Rather than cut out the fat and make reform, just raise taxes for the already struggling middle class. Genius... not!

On the subject of fat, there is SO MUCH of it. Greedy bureaucrats, rubber stampers, a health system that gives WAY too much in terms of hospital stays etc etc. Best to start with those greasy, smirking politicians as that is one major leak that needs to be stopped.

2 ( +4 / -2 )

I'm sure i will get downvoted like hell, but i'm glad that it will soon be easier to calculate the totals at grocery stores and restaurants that dont include tax in the prices. 2% isnt going to break my budget, but i feel bad for those who are so close to the edge that it will cause them problems.

1 ( +2 / -1 )

J- voters have a unique opportunity to give Abe,s LDP a kick in the ass come electiin time next summer ..thats their only chance of stopping the tax increase grab if they want. ...but TIJ..shooganai naa ....

One can only hope, but in this respect, I have lost faith in the Japanese people. They have never wised up to their leaders. It's almost as if the Japanese enjoy suffering. I'm bracing for what's to come.

2 ( +4 / -2 )

People here are standing on their hands. No one does anything or raises their voice.. Nail hits the head that stands out mentality.

We Japanese and long term foreign residents here should send a ton of emails complaining and raise awareness to stop this.

As I said in my other post. Life will be much more expensive and will damage the economy. Look at Australia, they have 10% GST and everything is very expensive, high unemployment, economy on the edge.

3 ( +4 / -1 )

To all Japanese and long term foreign residents! Rise up and voice concern! before it's to late, don't be a hai hai person

4 ( +6 / -2 )

AgentX, Japanese people are not sadistic, enough is enough, let's see what will happen.

0 ( +0 / -0 )

We Japanese and long term foreign residents here should send a ton of emails complaining and raise awareness to stop this.

I don't agree with all of what you say, Kenji - and that's OK! But on this point, I agree wholeheartedly! We need to see more pressure placed on the LDP.

0 ( +3 / -3 )

Kenji Fujimori, it won't work. Abe wasn't elected by majority Japanese people, he was elected by LDP members. He cares nothing other than buddies and bosses.

3 ( +4 / -1 )

And the proceeds from the tax hike will go in part to fund free nursery places to ease the impact on families and encourage Japanese to have more babies, as the population continues to shrink at a fast pace.

Hahaha, sureeeeeeeeee. Didn't they promise the same thing with the previous tax hike? God, we really need a revolution here in Japan, and fast.

4 ( +4 / -0 )

There is one certainty that has followed me through 5 continents, many countries, from teenage to adult...its that the price ALWAYS RISES for everything.

1 ( +1 / -0 )

No dialogue no public opinions, nothing, lobbyists are controlling mama boy Abe to their demands to derail Japan's economy. In theory making the country poorer will make stocks tumble and cheaper.

1 ( +2 / -1 )

The government also plans subsidies to offset the impact of the sales tax hike on some durable goods such as houses and environmentally friendly cars.

The government, i.e. Abe, has been saying for years that they want 2% inflation as it will somehow boost the economy through increased spending and wages. Although they have failed to reach this target a 2% increase in the consumption tax will definitely push up costs by 2%.

Now the government seem to be saying that this 2% increase in prices will risk a sharp decline in consumer spending and it has to take measures to "cushion the blow". So, according to the government, one minute a 2% price increase is good for the economy, the next minute it is bad.

I'm quite confused by these contradictions. Still, I know it would be too much to expect "journalists" to question Abe and Suga on these points. I would say that if you can afford to buy a car or a house you can afford to pay an extra 2% and no subsidies are required for those things.

3 ( +4 / -1 )

Pork barrel spending, massive over inflated beaurocracies, those with stocks laughing all the way to the bank . The working poor about to be replaced with even cheaper dispensable labor from south east Asia , while the populace quietly but begrudgingly accept their lot in life. Unambitious and inwardly thinking youth following the slow steady march to mediocrity. The Abe legacy will be talked about for years to come. Such a shame for such a naturally hard working , respectful and easily mobilized nation. If pointed in the right direction they could have been in a much better situation than this.

4 ( +5 / -1 )

Abe isn't qualified to speak on economics. He failed in his Abenomics. How can the govt assure people that Abe will not fail again ?

4 ( +5 / -1 )

@Kenji Fujimori

To all Japanese and long term foreign residents! Rise up and voice concern! before it's to late, don't be a hai hai person

Would love to mate but can't, I have permenant residency but I have no political voice.

I pay my taxes but can't vote. Not even locally.

@Akie

Kenji Fujimori, it won't work. Abe wasn't elected by majority Japanese people, he was elected by LDP members. He cares nothing other than buddies and bosses.

Excellent point....so true it's vomit inducing.

4 ( +6 / -2 )

Abe is a mama boy controlled by lobbyists

3 ( +4 / -1 )

We aren't living in communist China, to live under a rock. It's a 'democracy ' whatever that means anymore..

3 ( +3 / -0 )

Since the 8% increase, what benefits arises to counter from? Consumer spending already decreased and not much fdi nor investments occurred. Debts increased, more debts from the Olympic Stadium construction, unemployment increased, yet media hides the reality under the rug. Casinos soon to be built is a good thing though as it's long term.

-1 ( +1 / -2 )

Can't freeload in Japan btw

And as I mentioned before it's good to own your own business, don't be part of the working class forever.

4 ( +4 / -0 )

Chinas rise also made many Japanese factories close or be sold off

-2 ( +0 / -2 )

You cannot compare australia's economics to Japan. Completely different countries with totally different economic factors. Australia's cost of living is high because inflation has been at an almost constant 2%, not because of the GST. Japan has been close to zero for as long as i can remember.

1 ( +2 / -1 )

Ratings agencies rated sub prime junk as triple A. What a surprise to know they’re still in business.

4 ( +4 / -0 )

Time to do our heavy shopping now. The military will get the bulk of the increase. The 40+million foreigners will be paying their share of the new might be military, that’s why Abe is so keen on having foreigners come to Japan. Just a few short years ago the word foreigner was on his black list. How much will our aging folks see? Not much. Ossibly robot makers will see more than the old folks. Abe needs at least one successful feather on his cap before he retires.

-1 ( +1 / -2 )

Well--I guess that does it for me. It's time to sell my bar in beautiful downtown Sasebo, Japan and retire. A lot of small businesses like mine can't afford to pay 10%. And to up prices just chases away customers.

4 ( +4 / -0 )

Wow! Economics is so easy! Rather than cut out the fat and make reform, just raise taxes for the already struggling middle class. Genius... not!

Agree, there needs to be more transparency regarding government spending of tax money. I would first like to see a report of what percentage of tax money is being spend and where.

2 ( +3 / -1 )

I feel really sorry for the Japanese. but its the same the world over really. Elites run the show and the rest of us 7 plus billion simply need to suck it up. Something will eventually give...problem is the very same elites and a few new ones manage to usurp themselves back into power. Subjugation - Revolution - Subjugation - Revolution - Repeat! We need a complete rethink and part of that is limiting population growth. But that goes against big industries growth model who essentially is or very strongly influences government. So the future is rather bleak! Innovation today revolves around consumerism rather than making the planet sustainable because thats what people really care about today. The new generation, which is every previous generations hope of change is already lost too buried in the hypnotic grip of the latest smartphone or tablet and social media to even care! The narcissism and self of the youth of today is quite astounding and I guess its something thats genetically there but was frowned upon by previous generations. How will the new generation care about the wellbeing of the planet when none of them really experience it. Its astounding how few Japanese I encounter in the beautiful valleys with crystal clear streams accessible by car and on weekends. Sigh!

1 ( +1 / -0 )

CrickyToday 08:00 am JST

And another round of handouts to profitless companies.

Well, naturally. The owners of those companies are integral to LDP politicians' re-election strategies, as at the end of the day, keeping themselves in power is all they're really interested in.

1 ( +2 / -1 )

"I don't think the sales tax this time will create a setback in the economy,"

hahahaha... right. And when it's raised you guys will be saying, "How could we have predicted consumer spending would fall as a result? We can't understand why people aren't doing their civic duties and spending more!"

0 ( +3 / -3 )

We need a complete rethink and part of that is limiting population growth.

OMG! Pointing out the obvious will not fly well with our capitalist, only-way-is-up, brainwashed from birth, current generations. After all, fiat currencies and siphoning from weaker countries has served them well while they amassed all their shiny things.

Agree or disagree, but ask yourself one question and answer honestly: Would we be facing the same plethora of social and environmental problems world-wide if the Earth's population was far less?

Generations in the future, while they struggle to make amends for past generations, will ask themselves, "Why were they/we so shortsighted and greedy?" These times and the selfish ways we think will be recognized as a massive failure in human history.

0 ( +1 / -1 )

Look at Australia, they have 10% GST and everything is very expensive, high unemployment, economy on the edge.

Embellishing your viewpoint badly. Australia put it up from 0% to 10% in one jump and was fine after the initial white noise,which Japan with their pussyfooting around,should have done.My Japanese ex student, now living in Paris, complained last week about how expensive it is there,like in many other countries.And an economy that has not had a recession in 26 years is hardly on the edge.As you know,Australia has natural resources to offer up.

0 ( +1 / -1 )

Not a betting man but I'm confident that the government spend a mysterious amount on mysterious things rather than health care. As there is no transparity so who can tell? I'm going to buy a suit and garner enough lapel pins to look important.

0 ( +0 / -0 )

It still will go into effect just in time for the influx of over tourists for the 2020 Olympics

0 ( +0 / -0 )

This will be the nail in the coffin of growth, in this stagnant economy.

Every yen earned will be hung onto even tighter.

Salaries do not rise, cost of living and taxes go up.

Abe and the diet are never forced to endure the aftermath of their decisions.

5 ( +5 / -0 )

Abe and the diet are never forced to endure the aftermath of their decisions.

This! ^

1 ( +2 / -1 )

Too complex and too little between basically 10 and food at staying 8 percents, which effects will be small.

Had better simply increase or make larger descriptions.

0 ( +0 / -0 )

The sales tax in the USA is between 8-10% The UK 20% Iceland 24% Sweden 44-60%. Norway 40% South Africa 15% Mexico 16% Poland 23% Russia 18% Turkey 18% Germany 19% France 20% Japan 8%

Japan has a sale tax of 8% that is very low, as you can see from the above, I know tax is a very contentious issue, but its about time the big companies start passing on its profits to its workers who then can have a better standard of life.

-3 ( +0 / -3 )

@blue in green

Every yen earned will be hung onto even tighter.

This is what this whole thing is about. Great comment!

Folk won't spend because they will worry that they won't have enough for their retirement and save save save.

Exactly the opposite of what needs to happen.

And don't think that Abe and his crony gang don't know this. They do but don't care. They will be long in the box before the real consequences take effect.

Suffer the little (grand) children.

2 ( +2 / -0 )

Hi Brian Wheway.....Pretty please, review the comparisons. UK example.

VAT rates.........https://www.gov.uk/vat-rates

Please, the calculation/differentiation between VAT sale tax and JPN consumption tax say on a property sales transactions..... Hint …...

Stamp Duty Land Tax UK.......

https://www.gov.uk/stamp-duty-land-tax

So for a business attempting to invest and expand there workforce, in a global market place for say top notch database programmers developers, the costs involved to purchase a family home is going to encourage them to settle ????!!........

-1 ( +0 / -1 )

Brian Wheway excuse my barking, it was not meant to be a nag.

In Nagoya 10% on a property purchase is tough financial nut to crack for a family.

0 ( +0 / -0 )

I bought a new refrigerator last week just after the latest model came out. My choice was sitting pretty in the back corner of the display floor marked way down as it was no longer the latest and greatest. Avoided the 10% tax to come, super discounted price...Mission Accomplished.

0 ( +0 / -0 )

“These strawberries are going to be even more expensive next October”

says the caption, but that is incorrect if this from the article is correct:

“The measures will include plans to leave the sales tax on food unchanged at eight percent, Suga said.”

1 ( +1 / -0 )

Brian

Japan has a sale tax of 8% that is very low, as you can see from the above, I know tax is a very contentious issue, but its about time the big companies start passing on its profits to its workers who then can have a better standard of life.

With the exception of the US, most to all of the countries you’ve listed have very low corporate taxes. So it’s either we have high corporate tax or high personal tax. You can’t have both. Would you prefer that we have low corporate tax so all the fat cats get fatter?

0 ( +0 / -0 )

In Nagoya 10% on a property purchase is tough financial nut to crack for a family.

The consumption tax is only levied on the cost of the building, not the land. The effective tax rate is therefore lower than 10%.

0 ( +0 / -0 )

Very bad of you to do such a thing PM Abe. Why increase taxes when you can lower them? You lost a point.

2 ( +2 / -0 )

Thank you Scrote for correcting me, the equivalence is currently around 6.26% of the purchase cost on top of the agreed fixed asset value.

This will rise to around 8.27% dependent on fees and more importantly the age of the property. There is also a fixed asset value of the land which can rise to 2%.. Dependent again on transfer of ownership. There is a also acquisition tax .

0 ( +0 / -0 )

Hi Scrote can you advise on the brokerage fees?

Is the commission still 2/3% of the base price, plus consumption tax currently 8%. Although dependent if the seller is registered company.

Moving on, fire and earthquake insurance? Purchasers requiring a bank loan could not be afforded a choice. does that remain at 8%?...

0 ( +0 / -0 )

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