Japan has raised its consumption tax from 8% to 10% in a bid to find funds to pay its public debt and fund social welfare programs such as pre-school education.
The 10% hike will apply to most goods and services, including electronics, books, cars, clothes, transportation and medical fees.
Most foodstuff, however, will be exempted from the tax hike.applies to nearly all goods and services, though most food will be exempt.
As some form of relief, the Japanese government has also introduced a 5% rebate on purchases made using electronic payments, a move aimed at enhancing the use of electronic payment and cushioning the effects of the tax hike.
The tax hike is projected to add 4.6 trillion Yen to the government’s annual revenue, while at the same time put an estimated additional burden on households of more than 2 trillion yen ($18 billion).
Japan first introduced a 3% consumption tax back in April 1989. This was raised to 5% in 1997 and to 8% in 2014.