Updated: Nov 4, 2019
Written By: Nadira Anissa
Date Published: 1st November, 2019
Last month on October 1st, 2019, Japan increased their consumption tax from 8 to 10%.
As of October 1st, 2019 Japan's 8% sales tax has been increased to 10%. According to the Ministry of Finance, this is a last-resort attempt to sustain the social security system that helps support the elderly in Japan. However, these tax changes can be confusing for those living in Japan, because there are exceptions for certain products. We're here to help you navigate the new tax rates, and learn what has been affected.
So how does the tax work?
Food and drinks are not part of the tax, as they are considered daily necessities.
So if you decide to buy a drink in a convenience store near your house you’ll pay as usual. However, alcohol and restaurant foods will be taxed the 10%.
Yet, keep in mind, take-out food is not part of the tax. That’s why restaurants are trying to adapt their prices so their take-out and eat-in food have similar prices.
Things that you buy in places like the 100 Yen store that used to become 108 Yen, have now become 110 Yen when you buy them. One item doesn't make a big increase, but 10 items certainly will have a bigger impact.
Below is a chart from the Ministry of Finance for you to better understand the items that has its prices increased.
For more detailed information and explanation you can click here. The Ministry of Finance in Japan released an English explanation on the tax and also the reasons for it.
We also interviewed students living in Japan on their perspective of the tax Increase and whether or not it has affected their everyday life.
The Impact on Students
Most students that were asked about the tax, are well aware of this tax increase, and also the reasons for it.
Nabila Khansha Irawan, an Indonesian student currently residing in Osaka, studying in OCA大阪デサイン＆IT専門学校、was one of the interviewees that I asked on the topic of this tax increase. She mentions she's been preparing for the tax increase, “I’ve known about this tax increase for quite a while already, I heard it around June or July from my friends.”
As explained previously, Nabila also explained her understanding of the reason for the tax increase, “From what I know the reason for this tax increase is to pay the public debt, because now there's an increase in need for funds to the elderly. The population of the elderly is increasing, while the working population is decreasing."
Nabila is a kpop fan, and the tax increase will affect her ability to afford fan goods.
On the other hand Gusti Raganata, another Indonesian student that just recently graduated from University of Tokyo answered that, “I actually have heard about this tax increase on the news. However, if i'm not mistaken the increase was actually delayed.”
Yuki Takahashi, a Japanese student that is currently studying in Ritsumeikan Asia Pacific University, also explained her understanding of the consumption tax increase, “I believe the tax increase was implemented because of the aging population and falling birth rate in Japan. The tax will be used for social security reforms such as providing childcare and education to children under 6.”
What do you think about the tax increase?
“I understand why the tax needed to be increased. But honestly I wa