Tax increase

From 1st April, the consumption tax in Japan rose from 5% to 8%. The tax hasn't risen since 1997 and this has been enforced after an interval of 17 years. All concerns are that the consumers will refrain from purchasing, and the economic growth might decline.

In terms of statistics, one household of 4 people and a 6 million yen (US$ 58,800) annual salary  will pay almost 90,000 yen (US$ 866) more per year due to this tax increase. Most media has picked up on how this will influence the consumers, but actually, this affects not only the consumers.

When I watched TV on 31st March, the day before the tax increase, a reporter asked a station employee about how impact this tax increase would affect the company. He said that the automatic ticket gate systems needed to be changed and the investment would increase by 300 million yen (US$ 2.8 million). What a sum of money needed to change the systems! I was surprised that this tax increase affected industries as well and I'm wondering when and how they can collect the expense.

A few days have already passed since the tax increase was enforced, but I haven't felt any differences yet, even though I feel some supermarkets will raise their prices. I hope that this tax increase will be used effectively.