Japan’s planned consumption tax rate rise reforms on-schedule for December

28 October 2011

Early 2011 anticipation that Japan’s 5% consumption tax rate would be set for increase looks set to crystallize in terms of the planning reforms by mid-December.  The DPJ, Democratic Party of Japan, has just agreed this time schedule.

The planning will provide for the timetabling and staging of consumption tax increases, keeping in mind the target of doubling the current rate by 2015.  The plans are being put in place to cover the welfare costs and rapidly ageing population, quite apart from the massive post-earthquake rebuild costs being borne by the government.

While there is still opposition to the plans to increase because of concerns about their negative economic and political impact, it is anticipated that the government will submit a bill to parliament in early 2012 in respect of formalising the 2015 target.

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