Economy New wave of price hikes from 1 October

[thomas]

According to research firm Teikoku Databank, more than 4,500 food items will become more expensive in October, when many Japanese companies enter the second half of their fiscal year. This is a sharp increase from September but a significant decrease from a year ago. However, consumers are still feeling the pinch as the cost of daily necessities has risen. The prices of imported raw materials have gone up due to a weaker yen, which is why more and more Japanese firms are raising the costs of their products and passing the burden on consumers. This could hurt consumer confidence when their actual income is not increasing.

Examples:

• J-Oil Mills Inc. is raising its olive oil prices by 14 to 57 per cent, citing a heatwave hitting European producers, higher transportation costs and a strong euro against the yen. Processed meat firms are hiking prices by up to 20 per cent.
• A liquor tax revision will also come into effect, meaning that "third-category" beer-like alcoholic beverages will not be as cheap as before as Japan is raising the tax by 9 yen per 350-milliliter can. The corresponding rate for regular beer will be cut by about 7 yen.
• A one-day high-season ticket for Tokyo Disneyland, currently 9,400 yen ($63) per adult, will cost 10,900 yen. Japan Post Co. is raising fees by an average of 10 per cent for its Yu-Pack parcel delivery service.

Other changes:

At the start of the second fiscal half, Japan is launching a new invoice system designed to accurately indicate tax payments by businesses as multiple consumption tax rates are applied in Japan -- 10 percent for most products and 8 per cent for food and other specified items. It will require the seller of a product to issue an invoice, which includes the consumption tax amount and other transaction details, to the buyer. The document is necessary to receive the tax credit.

A new invoice system for freelancers:

Freelancers and others affected by the new rules have expressed opposition to the launch, joined by opposition party lawmakers. Those who earn less than 10 million yen ($67,000) a year in taxable sales and are exempt from paying consumption tax would now have to pay the tax if they choose to issue an invoice, though many are reluctant to introduce the costly system.

The income thresholds for dependents will be lowered:

The government will also address the issue of "income barriers," or income thresholds at which part-timers, often dependents of their spouses, must start paying or pay more income tax and social insurance premiums when their income exceeds certain levels. Companies that pay for the social insurance premiums of such employees will receive up to 500,000 yen per worker. The barriers are blamed for discouraging part-timers from increasing work hours. The rise in minimum pay will help such workers maintain salary levels with shorter work hours, raising concern that the country's labor shortage will become more serious.

New wave of price hikes, tax-related rule changes await Japan in Oct.

Japanese households will see their budgets further squeezed by a new wave of price hikes scheduled for October on food and services, while freelancers and those self-employed may have to shoulder higher tax burdens under a new invoice system.

english.kyodonews.net

 

[Mikawa Ossan]

Consumption tax (for most items) is at 10% now? Wow. Wasn't it something like 3% at one point?

 

[thomas]

Consumption tax (for most items) is at 10% now? Wow. Wasn't it something like 3% at one point?

That was a while ago!

Back in April 1989, consumption tax was introduced by the Japanese government and was initially 3%. It was the peak of the bubble economy and the reason of the introduction of the consumption tax was to finance social welfare spending. In 1997, the tax was raised to 5% and in 2014 it was increased to 8%. In October of 2019, consumption tax was raised to the current rate of 10%.

They were planning to raise it to 15% at some point, but that wouldn't go down well with the populace in the current economy.

 

[Lothor]

The article nicely summons up the dilemma for freelancers such as myself. I also have to wonder about the motivation of a government introducing a regulation that makes it more difficult both for me to do business with Japanese companies and for them to do more business with me, and I'll have to do some delicate negotiating with Japanese customers over the next few months.

I've come across a lot of young Japanese people who want to or have already set up their own business, the idea of working for a boss in a company being completely unappealing. I suspect (without a shred of evidence) that the Japanese government and big business wish to discourage such autonomy, hence the new regulation.

 

[musicisgood]

The article nicely summons up the dilemma for freelancers such as myself. I also have to wonder about the motivation of a government introducing a regulation that makes it more difficult both for me to do business with Japanese companies and for them to do more business with me, and I'll have to do some delicate negotiating with Japanese customers over the next few months.

I've come across a lot of young Japanese people who want to or have already set up their own business, the idea of working for a boss in a company being completely unappealing. I suspect (without a shred of evidence) that the Japanese government and big business wish to discourage such autonomy, hence the new regulation.

As I travel around Japan I got the impression that the small businesses is what's keeping the economy going at least it's the local economy.
I'm here in Okinawa or at least one of the islands off of Okinawa and it's really amazing to see that most people that have small businesses like restaurants they actually work out of their house it's pretty amazing to see it and see what's happening but that's the lifestyle on the islands here.
People have said many times over the past that Japan is a very rich country I think for us long-term residents that's been here since the 70s no one thing about the economy and the people they're really maybe two classes of people here and in my honest opinion you have the very wealthy and I mean wealthy people then you have the people such as probably many of us here on the form that are struggling from paycheck to paycheck.
I remember when there is no tax on the food items all items I believe.
But 10% on the items we buy in the grocery store it's really hurting I'm serious it's it's really hurting you you have Cosmos which just puts the tax on the price of its merchandise which makes it really more convenient because you know exactly how much it's going to cost you at the register.

I will say one thing about the islands off of Okinawa that everything is at least 30% higher even more in some cases actually maybe 50% higher in on food prices but then again I haven't been to a farmer's market yet which I understand is super super cheap and everybody on Saturday and Sunday goes to them they actually take the bus and the buses jam-packed with people.

Anyway if you guys ever get a chance to visit the tropical Islands off of Okinawa I highly recommend it and just backpack it and either bring yourself a bicycle or learn how to ride the buses actually the bicycle is the best way to get around but the bus for one of the bigger islands is pretty much mandatory and you can get a one day pass or a 5-day pass a 5-day pass cost about 20 bucks one day passes $10.

 

[Mikawa Ossan]

Oh yeah, if you can buy local produce from the farmers directly, it's very cheap. I remember the large haul of mikan (oranges) that I would score from the Chita Peninsula. Definitely worth the trip!