This archive report was first published on 2 October 2019.
On October 2, 2019, Japan implemented a 2% consumption tax hike, raising the rate from 8% to 10% to fund its public debt and social welfare programs.
The new tax rate applies to most goods and services, including electronics, books, cars, clothes, transportation, and medical fees, but most foodstuff remains exempt.
As a relief measure, the Japanese government introduced a 5% rebate on purchases made using electronic payments, aiming to enhance the use of electronic payment and cushion the effects of the tax hike.
The tax increase is expected to generate an additional 4.6 trillion Yen in annual revenue for the government, while placing an estimated burden of over 2 trillion yen ($18 billion) on households.
Japan's consumption tax has undergone several increases since its introduction in 1989, with previous rates being 3% in 1989, 5% in 1997, and 8% in 2014.
