Japan’s consumption tax: Taxonomics

Posted: August 2, 2013 in economy
Tags: , ,

UK Only Article: 
standard article

Issue: 

Liberty’s lost decade

Fly Title: 

Japan’s consumption tax

Rubric: 

A crucial rise in a controversial levy may be in doubt

Location: 

TOKYO

THE Japanese are among the world’s most reluctant taxpayers. They reserve their deepest loathing for value-added tax (VAT). That may be because one of the inventors of VAT, Carl Shoup, an American economist, used them as guinea pigs for his new levy during the occupation after the second world war. Japan soon scrapped VAT, reintroducing a “consumption tax” only in 1989. This quickly became as hated as its foreign-imposed forerunner.
The gaijin are watching again as Japan struggles to raise the consumption tax for only the second time since its introduction. The IMF, the OECD (a Paris-based club of mainly rich countries) and local institutions all reckon a series of rises is the only way for Japan to control its gross public debt, approaching 250% of GDP.

The Democratic Party of Japan, which won legislative backing for the …

via Economic Crisis http://www.economist.com/news/finance-and-economics/21582542-crucial-rise-controversial-levy-may-be-doubt-taxonomics?fsrc=rss

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