VAT

Postponement consumption tax increase leads to rescheduling of other fiscal measures

The government has formally decided to postpone a number of fiscal measures,  as the planned Consumption Tax increase to 10% was delayed to 2019 earlier this year.  Fiscal benefits when buying a house and the new taxation system for cars, which were scheduled for introduction next year, have been rescheduled to be implemented in April 2019.

In introduction of a new invoice system necessary for the introduction of the diversified tax consumption tax rates, will be postpone from 2021 to 2023.

 

Postponement of VAT increase impacts other fiscal reform

Nikkei Online reports on June 2 that the second postponement of the VAT increase to October 2019 is likely to have an impact on other planned fiscal reforms as well.

Japan postpones VAT increase for second time

On Wednesday June 1st PM Abe announced that he would again delay the increase in consumption tax. The increase of the VAT rate to 10% was scheduled for April 2017.  The hike has been delayed for anouther two-and-a-half years until October 2019.  Abe stated that the hike at this point in time would "create a risk of the country falling back into deflation" hurting the chances that the Japanese economy would regain a sustainable growth track. 

2016 Tax reform round-up

In its drive to stimulate the Japanese economy, the Abe government has introduced various fiscal measures for 2016, most notably the accelerated decrease in corporate tax rates and the introduction of a diversified consumption tax. The upcoming VAT increase to 10% in 2017, is likely to be combined with keeping a lower VAT rate at present 8% for sales of food and drink. Below a round-up of the most important measures for the coming fiscal year. 

Update taxation plans for 2016

The on-going discussions in the ruling LDP Tax System Research Council are yielding new fiscal reforms for the coming year.  Most conspicuous is the proposal to accelerate the decrease of corporate taxation rate to below 30% next year at 29.97%.  It had been expected that the effective corporate taxation rate would reach the 20% range in 2017. Nikkei Online (J) reports on November 30th on a number of other measures, which are likely to be implemented from April next year. 

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