Nope, this isn't a spooky Halloween joke. Beginning today, October 1, Japan's consumption tax is raised from 8 to 10 percent, despite the outroar of controversy. This means most items purchased, such as household goods, souvenirs, clothing, etc, is subject to the new price. However, this tax hike comes with a set of complications, confusing both consumers and retailers because not everything will be taxed at 10 percent. Baffled? Let us explain some of the nitty-gritty details.
Restaurant meals are taxed at 10 percent but take-out is 8 percent
In general, food and nonalcoholic beverages will not be affected by the increase. However, you’ll be taxed the extra 2 percent for eating at your favourite café or restaurant, as reported by The Japan Times. Meals eaten in restaurants, bento bought in convenience stores and eaten in the sitting area, and amusement park food eaten on a restaurant’s bench are taxed at 10 percent. However, getting your meal to go receives the standard 8 percent tax rate. For the sake of the environment, it's better to say no to plastic take-out containers and buck up the extra 2 percent to eat in.
Alcohol is taxed at 10 percent
Whether you’re drinking for here or to go, alcohol is taxed at 10 percent. Sorry, we're grieving too.
The extra 2 percent will supposedly help government debt
If it makes you feel better, the extra tax on your pint of draft beer will help the Japanese government’s exorbitant debt. According to The Mainichi, the government owes more than ¥1 quadrillion, the bulk of it from social security. Japan’s population is ageing and a vast majority are elderly and depend on social security. The tax hike will also help relieve the Defence Ministry and the Land, Infrastructure, Transport and Tourism Ministry.
Don't fret – the tax hike won't affect small purchases so much, and overseas tourists can still enjoy tax-free shopping in Japan. Check out our guide to avoid paying consumption tax altogether.