Japan Press Weekly

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2015 April 1 - 7 [ECONOMY]

Regressive tax hike deepens poverty and social inequalities

With its regressive nature, the consumption tax hike has deepened poverty and social inequalities, shown in survey results that the Japanese Consumers’ Co-operative Union (JCCU) recently published.

According to the survey, in 2014, households with an annual income of less than four million yen paid about 166,000 yen in taxes for their purchase of goods and services. Their consumption tax burden accounted for 5.44% of their annual income, up 1.96 percentage points from a year earlier. In contrast, as for households with an annual income of more than 10 million yen, although they paid about 397,000 yen in sales tax, their tax burden ratio only went up by 1.02 percentage points to 2.24% during the same period.

In the same survey, the amount of consumption tax payment per household increased by 74,000 yen to 241,000 yen in 2014 from 167,000 yen in 2013 and the average tax burden ratio climbed to 3.6% from 2.46%.

The consumption tax rate increased from 5% to 8% in April last year.