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So, now that we’re one month in, how’s everyone enjoying the latest sales tax increase to 8%?
A consortium of Japan’s online businesses, including ebook sellers and advertisers, met on April 10 to hash out some demands for the government before they get taxed right out of the competition since business such as segments of Apple and Google aren’t necessarily subjected to Japanese sales tax rules.
If you were to buy a physical product from overseas, you wouldn’t have to pay the Japanese sales tax since it was not a domestic transaction. Despite that advantage, the customer would still have to deal with shipping costs and other hassles to make a domestic dealer the better choice.
However, when we consider data purchases, you can basically get the same ebook in the same time without any shipping from a foreign company. Adding an increasing sales tax in Japan into mix and you’re likely to see more and more citizens look beyond the seas for their apps and digital media.
According to an interview by Economic News, the president of Kinokuniya bookstores had this to say:
“The 8% tax is a big handicap. When the tax becomes 10%, we may start seeing some raise the white flag.”
His and other ebook businesses may consider abandoning the market all together if nothing changes. Still in its early stages, the group hasn’t made any specific demands regarding what kind of reform they want to see. The Ministry of Finance is said to be preparing a plan to have a “tax agent” to ensure that foreign companies operating in Japan pay up properly. Perhaps the online Japanese businesses would like to see that expanded to foreign countries operating virtually in Japan as well.
It would seem that whatever happens in the coming years, it’s the regular people who are going to get the worst of it. Either Japanese companies will be aided by stricter tax enforcement and we’ll all pay more no matter where we go, or those companies will fail to thrive and Japan will sink further into economic stagnation.
Source: Economic News
Read more stories from RocketNews24. -- You won’t believe what’s at the end of this 4-hour line -- Don’t own a television? Japan’s public broadcaster doesn’t care, but still wants your money -- Tax the Handsome: One Homely Guy’s Solution to the Declining Birth Rate
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8 Comments
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Silvafan
Lower the price!
kibousha
This is the reason why they do region locking on dvds, blurays, or digital content in general. Prices outside Japan are usually cheaper and with the tax increase, they're even cheaper. Personally I always purchase digital content from outside Japan, through VPN of some sort. The trouble and the learning experience is worth the savings.
jajanator
Rather than setting "a “tax agent” to ensure that foreign companies operating in Japan pay up properly", they should have made sure that the japanese companies didn't abuse the tax increase to raise prices even further. So many shops suddenly went from "1050 yen 5% tax included" to "1050 yen tax excluded".
John Galt
Starve the tax beast.
pointofview
@jajanator,
I`ve noticed this too. It was the perfect opportunity to raise the base prices. Such a scam.
RowanM
@Jajanitor @pointofview raising the sales tax affects other places in product production, as well. Transport/fuel costs etc go up, so prices BEFORE tax go up as well. It's really not necessarily anything so insidious.
That being said, I'm sure some companies have unscrupulously raised prices unnecessarily, but just because prices were raised doesn't make it inherently a "scam"
Scrote
There will always be an optimum tax rate that maximises revenue. The Japanese government asserts that multiple tax rates are too "confusing" for Japanese people and insists on a uniform consumption tax rate. A 10% tax rate on e-books is too high and will likely lead to reduced revenue. Rather than implement a lower rate on such goods the government proposes to waste more money chasing overseas companies for revenue they are not likely to get.
John Galt
Scrote, the optimum tax rate for those who earn their money is ZERO. Starve the Taxilla Beast!