The government has confirmed that Japanese consumption tax will rise from 8% to 10% from 1 April 2017. This latest date was announced in the 2015 Tax Plan.
The increase in the consumption tax rate was first scheduled for 1 October 2015, but was delayed in November 2014. This delay followed the economy slipping back into recession in 2014 after an initial rise in consumption tax from 5% to 8% on 1 April 2014. The two-stage rise in consumption tax is part of the wholesale reform of the Japanese economy by the current government. The rise in the tax has been deemed necessary to help manage the fast rising social costs such as the cost of provision of old age pensions.
The 2015 Tax Plan also includes plans for tax breaks for wealthy individuals, in an effort to boost household spending, and plans to boost business investment.
