How the Japanese Consumption Tax Hike is Affecting Consumers

After years of back-and-forth, Japan followed through with its consumption tax hike on Oct.1. In the move originally scheduled for October 2015, the country introduced a two-tier system, now taxing all goods deemed non-essential at 10 percent, while essential items like supermarket and take-out food remain at the previous flat rate of 8 percent.

According to a survey carried out by Kyodo News, about a quarter of Japanese consumers have decreased their spending in the aftermath of the price increase. About half of Japanese said they welcomed the tax hike, which is expected to help the country’s social services strained by an aging society. Another half said they rejected the increase.

More than 70 percent of respondents also said they worried about decreased consumer spending affecting the economy negatively. 82 percent found the new two-tier system “complicated”.