VATLive > Blog > Consumption Tax > Japan ¥2 trillion stimulus for Oct 2019 Consumption Tax rise to 10%

Japan ¥2 trillion stimulus for Oct 2019 Consumption Tax rise to 10%

Japan is set to raise its Consumption Tax rate from 8% to 10% on 1 October 2019. To prevent a repeat of the last increase’s collapse in consumer spending, Parliament has this week approved a ¥2 trillion range of consumer and retail stimulus. This includes retail vouchers for low-income shoppers and families.

A new, reduced Consumption Tax rate of 8% is being introduced for basic foodstuffs.

The rise is part of two-stage increase; the first, from 5% to 8% in 2014. This tipped the country into recession. As a result, the second second rise has already been postponed twice. However, this approved stimulus will seek to lock-in the rise for October.

Japan has the largest public debt of the developed world at 223% of GDP, and a fast ageing population forcing the rise in indirect tax.

Latest Japanese news

Japan 8% reduced Consumption Tax rate

January 23, 2019

Japan is scheduled to complete a two-stage doubling of its Consumption Tax rate to 10% on 1 October 2019. The first part of the rise, from 5% to today’s 8% was enacted on 1 April 2014.

Japan confirms 2019 Consumption Tax hike

October 14, 2018

Japan is to confirm this week its plan to complete the second rise in its Consumption Tax, from 8% to 10% in October 2019. ...

Japan on track for 10% Consumption Tax 2019

August 13, 2018

Japan’s latest growth rates mean the planned rise in its Consumption Tax from 8% to 10% in October 2019 will still go ahead. The...

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.
VATlive newsletter

Sign up for our free newsletter stay up-to-date with the latest tax news.

VAT Voice

Sign-up to VAT Voice, Avalara’s monthly round-up about VAT and legislation updates to help you stay ahead of the curve.