Japan ¥2 trillion stimulus for Oct 2019 Consumption Tax rise to 10%
- Mar 28, 2019 | Richard Asquith
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.