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Consumption Tax Hike in Japan Leads to Last Minute Shopping
In an attempt to curb Japan’s overwhelming debt level, consumption tax in the country will be raised from 5 percent to 8 percent in April 2014, with most companies passing the burden of the tax onto consumers and some companies raising prices of their products. For example, the price of Coca-Cola from a vending machine will be raised by 10 yen and other companies are charging the same amount for a product but are shrinking packaging size. As a result, many consumers in Japan did last-minute shopping in March to buy products before the tax hike takes effect, and many retailers offered special sales during this rush. The amount of money spent by consumers in March is expected to cover any potential losses by retailers over the next few months, but it remains to be seen how the tax will impact Japan’s economy in the long-term.
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