Christmas came early for retailers in Japan last week as thousands of shoppers flocked to stores to make purchases before the consumption tax (similar to sales tax/VAT) rose from 5% to 8%, which naturally took effect on April 1st. For several days, every store was filled to capacity with shoppers stocking up on shampoo and beer and toilet paper. (One person interviewed on the news had bought 3 years worth of cigarettes just to save the 3%.) One reason Japanese consumers reacted so strongly to the tax increase is that for the past two decades Japan has had effectively zero inflation, with prices on almost everything (except oil) staying about the same or even falling in some cases. The tax increase is one way Prime Minister Shinzo “The Man Who Makes Our Anime Cheaper” Abe is forcing prices higher, which will hopefully get Japan’s economy growing again. While the sales tax or VAT in your country probably only applies to certain products (not to staple foods or educational materials, for example), Japan’s consumption tax is charged for virtually everything, from normal everyday purchases to buying land or a house and even paying tuition for education.
A 3% tax increase on just about everything in Japan.
