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Japan strong growth paves way for 2nd Consumption Tax rise


Japan strong growth paves way for 2nd Consumption Tax rise

Following a sharp decline in economic performance following the Japanese Consumption Tax rise to 8% in April 2015, growth has returned to the country paving the way for the second rise.

The 2nd sales tax hike to 10% was announced at the time of the first in 2012.  It is part of a plan to help fund the social security costs of a rapidly aging population.  One of the conditions of both tax rises is that the economy is growing at at least 3% per annum.

Latest forecasts suggest Japan will return to 2.7% growth in the second half of 2014, which compares to a near 5% shrinkage in the second quarter of the year.  This was largely due to spending being brought forward to the first quarter in anticipation of the April tax hike.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.