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Will Japan’s consumption tax hike fix its fiscal woes?
After two postponements resulting in a delay of four years, the Japanese government at last raised the consumption tax rate from 8 to 10 per cent as of 1 October 2019. The revenue from the consumption tax will be used exclusively to finance growing social security spending such as pensions, medical and old-age care and support for childbearing and childrearing. The government introduced dual rates with the rate on take-home food items staying at 8 per cent to protect the poor. The rate increase also came with frills to appease consumers, such as special subsidies for purchases made by non-cash payments, to reduce a ... (full story)