Japan Waits for Decision on Sales Tax

December 17, 2012 Taxation in Japan

Tax on SalesTOKYO – Japanese taxpayers will have to wait until next year to find out if they will see their sales taxes go up over the next few years.

In a television interview conducted on December 16th the newly elected Prime Minister of Japan Shinzo Abe commented on the feasibility of raising the country’s sales tax rate, saying that no decision can be made on the matter until August next year.

Shinzo Abe explained that in order to make a decision on whether Japan can bear the burden of an increase to the sales tax, more information will be needed on the current state of the economy, and further indication will be required on whether the country will see revived economic growth in the new year.

The proposed hikes to sales tax has been debated in Japan for over a year, and were eventually passed in Parliament in August 2012, but the Prime Minister must make a decision on whether the country’s economy has revived enough to warrant enacting the increase.

He suggested that the decision will be made after full data is compiled on the economic performance of the country during the first two quarters of 2013.

If the increase receives the go-ahead from Shinzo Abe the sales tax in Japan will rise from 5 percent to 8 percent in April 2014, and eventually to 10 percent.

Photo by crowderb