Japan Press Weekly

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2013 October 2 - 8 [ECONOMY]

Low income earners pay more in consumption tax relative to income: private think tank

A private think tank estimates that households with an annual income of less than three million yen will pay nearly 60,000 yen more in the consumption tax, Akahata reported.

Mizuho Research Institute Ltd. in its report released on October 3 calculated how much consumption tax households in each income bracket will pay annually after the tax hike by using data from the 2012 government survey on family income and expenditure.

According to the report, when the consumption tax rate will be increased from the current 5% to 8% next April, a household in an income bracket of less than three million yen will have to pay another 57,529 yen tax a year for purchases of goods and services and a non-working elderly household 78,382 yen.

Meanwhile, households in income brackets between 6 million and 7 million yen and of more than 10 million yen will pay 95,562 yen and 142,147 yen tax respectively on consumption expenditure.

The report also indicated that if the consumption tax rate climbs to 10% in October 2015 as the government plans, the total amount of consumption tax further imposed on families whose annual income is less than three million yen will reach 191,764 yen.