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%

  • 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.

Latest Japanese news

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 can be contacted at: He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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