Japan consumption tax increase
Japan has officially raised its consumption tax from 8% to 10% starting 1 October 2019. This means that purchases for any Japan activities will be charged a 10% tax rate instead of the usual 8% except for some items that fall under the reduced tax rate. If you’re planning a trip to Japan soon, here is how you’ll be affected by the change.
Why is there a tax hike?
The Japanese government says the increase in consumption taxes are needed to help cover ballooning social security costs and to pay down their current massive public debt. Some items subjected to the tax hike include:
- Dining in the food establishments
- Commuter passes
This is in addition to the departure tax that has been in place since 7 January 2019.
Effect of consumption tax hike
1. Food & Beverage in Japan
Eating in vs Dining out
You can’t avoid eating out whilst in Japan, and this means you will be affected by the increase in consumption tax. But, this only applies if you are dining in the establishment. If you’re purchasing a bento to go at the convenience stores, be sure to say “O-mochi kaeri (I’ll take it to go)” to avoid the 10% tax. Say it as soon as you get to the register so that the employee will calculate your total cost with 8% consumption tax.
Purchases Over 5,000 Yen are Tax-Free – good news to all of us who head to Japan to shop for luxury items, beauty products and streetwear!
If you make a purchase of consumable goods like medicine and cosmetics between 5000-50,000 yen at the same store on the same day, you will be eligible to be tax-free. Do note that the products cannot be opened while in Japan and only visitors leaving the country within 30 days can use this.
For purchases of general merchandize such as clothing, electrical appliances and furniture, purchases over 5000 yen at the same store on the same day are tax-free, for those leaving the country within 6 months.
3. Commuter passes
Transport passes will also be affected by the consumption tax hike. Five Japan Railway companies that service regions other than Hokkaido have now implemented increased prices in light of the sales tax hike.
JR East plans to raise fares for IC card users on the Yamanote and other lines in and around Tokyo. Central Japan Railway Co. (JR Tokai), West Japan Railway Co., Shikoku Railway Co. and Kyushu Railway Co. plan similar fare increases. JR Tokai plans to raise fares for reserved seats on the Nozomi bullet train running between Tokyo and Shin-Osaka stations on the Tokaido Shinkansen Line
Apart from transport passes, attraction tickets will also see the same 2% increase in their prices. From the likes of our favourite Universal Studios Japan to even a day tour to Mount Fuji, you can expect to see the price increase across the board.
How to save more on your Japan trip
In light of the consumption tax hike, travelling to Japan just got costlier. But, fret not! We’ve listed down some handy budget hacks below for you to ensure you don’t burn a huge hole in your pockets.
- Booking flights and hotel stays early also help reduce the burn on your wallets. Check out some cheap accommodation options under USD60/night in Osaka and Tokyo.
- EVERYTHING in Japan is yummy! These 10 places can fill your bellies for less than USD15 and convenience stores like 7-11 and FamilyMart are home to gems that you can’t miss out on trying. Be sure to opt for take out instead of dining in!
Enjoy savings for your holiday on Klook!
Keep your eyes peeled and your Klook app ready for a promo that’s happening soon. For those already planning a holiday in the near future, you can already start adding your travel essentials and experiences into your wishlist!