Japan’s recovery means doubling of Consumption Tax probable

Fri 17th May 2013

The publication of strong GDP figures for the first quarter of 2013 means that the conditional Japanese Consumption Tax rise from 5% to 10% is now likely to go ahead.

The increase in Japanese Consumption Tax to 10% was first proposed in July 2012.  It was submitted to help fund the social costs of a rapidly ageing population, and large public debt.  The plan is to raise the Japanese VAT rate in two stages: to 8% on 1 April 2014; and then to 10% on 1 October 2015.

However, a condition introduced to the Tax Bill stipulated that Japan’s economy must be growing again.  The latest quarterly result of 0.9% growth in the quarter is relatively strong in global terms.  It is likely that a final decision will be taken after the second quarter results are published.

You can read more about the Japanese Consumption Tax rise transitional details here.

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