Days After the Consumption Tax Increases – How is Japan Doing?

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  • On October 1 2019, the 10% consumption tax officially went into effect in Japan. Before the tax increase, the whole country witnessed massive consumption waves, in which people rushed to buy goods for storage, especially luxury items. On the last day of the old tax rate (September 30), shops and malls saw long lines queued up at checkout counters to save that 2%. What about after the tax increased? Japan Info will give you a look at some of the latest news related to the new consumption tax!

    Confusion between new and old tax rates

    Tax-free Sushiro
    The sushi restaurant chain Sushiro encountered a loss on the first day of the new tax. About 40% of Sushiro restaurants had a system failure that caused many bills to be tax-free instead of applying the new 10% tax. NikkeixTECH )

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    Ministop still charged the 8% consumption tax 

    The convenience store chain Ministop reported that from 0 AM to 3 AM on October 1, some products that were supposed to be subjected to the new taxation had remained unchanged, taxed at 8%, even though the bills are printed with “消費税(consumption tax) 10%”. Ministop has publicly apologized to the customers for this inconvenience. (itmedia)

     

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    Doutor in trouble with Take-away

    Popular coffee chain Doutor was also having trouble because of the tax separation between eat-in and take-away. Take-away food is still taxed at 8%, while eat-in is taxed at 10%, therefore, there have been many incidents with registers having system problems. (hochi news)

     

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    Train ticket machines having problems with ticket prices

    On the morning of October 1st, 57 automatic ticket vending machines of Osaka Metro at 24 train stations in the inner city of Osaka did not work properly because of ticket prices having a tax rate error, which prevented 9 passengers from purchasing their tickets. Osaka Metro apologized and issued tickets for these passengers before restoring the system. The Kyosei Line, which operates in Chiba Prefecture, suffered from the same situation at four stations, and by about 8:30 AM the ticket machines were back to normal.

     

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    Some bus routes in Kanagawa and Saitama prefectures also had confusions when calculating taxes on some bus tickets. The cause is still under investigation. mainichi )

    Promotions and bonus points are in the spotlight

    In response to the new tax, people began to pay more attention to bonus points and promotions. The most noticeable one is the newly activated reward system for Suica used for transport and shopping with IC cards, operated by JR company. Normally, the common plastic Suica card will earn you 1 point for every 200 yen of train tickets, while the mobile Suica (app on smart phones) will earn you 1 point for every 50 yen spent on train tickets. According to JR East, at the end of September, there were almost 2 million new registrations for mobile Suica.

     

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    You should also pay attention to rewards programs like those of Rakuten, Bic Camera, or the shops and supermarkets near your area. Bonus points are usually multiplied by 5, multiplied by 10, or sometimes you an get cashbacks from the total paid amount. For example, LINE currently has a supermarket shopping program with 成城石井 (Seijoishii) and LINE Pay that gets you a reward equal to 20% of the total payment amount. I received the reward immediately!

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    “Cashless” payment is trending

    By the time consumers are ready to take advantage of all payment methods to “evade” taxes, the Japanese government has taken advantage of this opportunity to accelerate the Cashless campaign (キャッシュレス) meaning “paying without cash”. The Ministry of Trade, Economy and Industry has launched this campaign to encourage people to use credit card, debit card, prepaid, and postpaid payment apps.

     

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    Therefore, the end of September and the beginning of October have witnessed an explosion of promotions for new registrations, such as installing the apps that give point rewards or cash-back. This in turn has made people get more interested in paying with cards and phone apps, thus limiting the use of cash. Popular apps like LINE Pay, Rakuten Pay, Paypay, etc. all are promoting a reward of 5% point-back on the total spending amounts until early 2020. There are even smaller scale campaigns and those with shorter duration in which users/consumers can get up to 20% off the total spending amount!

    Anyone can take advantage of these payment methods and end up saving money. This is also an opportunity for you to learn useful Japanese words by using the apps in Japanese! For instance, an attractive promotion from Paypay is Uniqlo corporate campaign, in which you will get 1 free Uniqlo heat-tech when you buy 1 with Paypay. The price must be 990 yen (before tax) for adults and 790 yen (before tax) for children. The condition is that you must install the Uniqlo and Paypay apps, activate them, and use them by registering for membership and payment. Click here for more details.