On October 1, 2019, Japan’s consumption tax finally increased to 10%. This had been long in the making, and something Japanese residents knew would eventually happen. However, within the first days of the consumption tax increase (which went up from 8% to 10%), retailers and consumers have been failing to adjust, and the environment has become the sales tax’s first victim.
As everyone was getting ready for that infamous sales tax increase, the newly appointed Environment Minister Shinji Koizumi had told reporters that Japan would take a leading role in the reduction of plastic waste.
This was also incredibly important for Japan, which produces the second largest amount of plastic per capita (just behind the U.S.), and thus is in need of new reforms that will decrease the consumption of single-use plastic.
Little did Koizumi know that the 10% sales tax would end up resulting in higher domestic plastic consumption.
To ease the negative impacts on people (particularly low-income families), the government implemented some fiscal measures, such as some stores offering 5% rebates for cashless payments. One of the most notorious measures is that convenience stores, coffee shops, and restaurants add the 10% consumer tax when people eat in, while adding the 8% tax when people order things to-go.
As a result, people are opting for take-out food. Twitter users have even noticed this trend in food courts, which a user found empty as people were opting to eat while walking around the mall or outside.
“I went to the food court now, and the failure of the tax raise is obvious…
First of all, this was the first time I saw the food court so empty at that usually busy time of day. Also, everyone chose something like big mac or ice cream instead of pasta or udon. They opt for takeout, get out of the mall and eat while walking around.
It’s a loss for the mall itself, and its exterior looks bad.”
— 御明さき (@miakesaki) 2019年10月2日
However, this behaviour is understandable since the 2% increase, while small, adds up.
The problem is that, in order to get things to-go, one has to produce more garbage. There is no alternative. The bento will most likely be in a plastic container. Depending on what you are eating, they will give you chopsticks (which come inside a plastic bag), a plastic spoon, or a plastic fork. Let’s not forget that, since the contents are likely hot, you will end up with a plastic bag as well.
Plastic, plastic, and more plastic. If only the government, Shinji Koizumi included, could have predicted this… and in fact, they should have predicted this. Understanding consumers and their thoughts during the aftermath of the 2014 fiasco that occurred when consumer spending dropped after the sales tax increased from 5% to 8% should have been done more carefully. After all, the government carefully prepared these fiscal measures in order to prevent the problems that led to a recession in 2014, and which caused Abe to delay the proposed increase to 10%.
So, how is it possible that something as simple as understanding that an incentive to order things to-go would lead to more plastic consumption? The fact that this is happening just weeks after Koizumi’s notorious comments to the press when he proclaimed Japan’s role in reducing the world’s plastic consumption makes the whole scenario both comical and infuriating. As Jean de la Fontaine said, “A person often meets his destiny on the road he took to avoid it.”
The saddest thing is that, as a consumer, I was part of the problem!
Just the other day I decided to make a small stop at a Starbucks before heading to work. My coffee routine is simple, and whatever I get I drink it there while asking for a real coffee mug or espresso cup to avoid creating more garbage. This time I wanted to get an espresso shot, and when the cashier asked me if I was going to drink my coffee there or if I wanted it to-go, my brain stopped for a moment. The first thing that came to my mind was the new consumption tax, and that drinking my espresso inside that Starbucks would result in having to pay more. I didn’t think of the fact that paying an extra 2% on an espresso would be insignificant, and I didn’t think of the garbage I would be producing. I simply focused on the dilemma of having to pay more versus having to pay less. And thus, in the second it took me to process the cashier’s questions, I said I wanted it to-go.
It wasn’t until I received my paper cup with its plastic lid that I realized what I had done. I was so mad at myself. I had just broken my own norms and rules over a few extra yen. It didn’t help that I had ordered an espresso, which takes about 1/10 of the paper cup and which one can drink in less than a gulp.
I exited the Starbucks with a trail of sparrows and a Septa yelling, “Shame! Shame! Shame!” as I walked to work.
The consumer tax increase was set to happen years ago, but the 2014 tax hike that saw Japan’s sales tax go from 5% to 8% was handled so poorly that consumers rushed to stores to buy all necessary or desirable goods on the days before the increase was set to happen. By the time the sales tax had gone to 8%, consumer spending had decreased dramatically and Japan had entered yet another recession.
As a result, Abe’s government delayed the proposed hike to 10%, its upcoming existence looming like an inevitable doom. Japanese residents knew it would come one day, and worried about the impact that such a tax increase could have.
However, the government had learned from what had happened in 2014, and thus devised a set of fiscal measures that would ease the economic impact on consumers. For example, groceries would be taxed at 8% while regular goods would be taxed at 10%.
We are still in the early stages of this sales tax hike, so the full effects will be felt and analyzed later on. Nevertheless, it is astonishing that within the first days of being implemented, the environment has become a very apparent victim of what many considered to be a poorly executed consumption tax increase that was supposedly carefully crafted.