Sunday, March 30, 2014

Leopaul's Heaven and Hell: Adapting to Japan's 8% tax hike



As you may now that beginning in the 1st of April, 2014, all of Japan will face the rise of the national sales tax from 5% to 8%. This is the first time it happened since 1997 that a tax hike in Japan occurred. So, what does that mean? That means most Japanese will face even more pain in their pockets and why did Japan face such a dreaded hike? No one knows but some say it's the work of the Diet to push this country out of the debt zone but between you and me, that tactic won't work and expect the consumer spending to drop because of the new increase of the national tax that will really put a dent out of it.

So...how to put it this way regarding the 8% tax hike? Take this Toyota 86. The G model with the 6-speed model costs about 2,410,000 Japanese Yen, right? That's when the 5% was applied to it but what happens when we take it away? It costs 2,295,238 Yen. Now what happens when we applied this new 8% tax hike to the price...wanna know how much it costs? It now costs 2,478,857 Japanese Yen! That's about a 69k increase when the tax hike in Japan is implemented! Still, that price won't stop you from having one...I think.

What about your daily groceries? I'm not sure the average grocery spending per Japanese household but where I am sitting from, me and my family spend about 150 US Dollars of grocery spending per month...theoretically. Suppose with the 5% tax added to your monthly grocery, it costs about the Japanese housewife's grocery shopping equivalent of 160 US Dollars but what happens when you calculate it with Japan's new 8% tax hike? Wanna know how much? Well, I'd expect to be somewhat below the Japanese housewife's grocery shopping equivalent of 165 US Dollars, a $5 increase when the 8% hike was implemented. Hmmm....

Well, there are some companies trying to adapt to this new situation here in Japan. Bandai, for example, plans on introducing new Gashapon machines made to dispense high-value toys in larger, can-shaped packages. Those new cans sell for a high price but filled with big toys worth 200 to 500 Japanese Yen. Scaling that up, that's only 2 to 5 US Dollars. Then, there's Subaru, which plans to sell their new Levorg sports tourer this April. Although the pricing remains unknown before its Japan release, I'm expecting the pricing will be below 2.7 million yen and in theory, that new pricing was adopted with Japan's 8% sales tax. Well, what about that upcoming PS3-exclusive iM@S One For All? For starters, it says 7600 Yen plus tax for the normal version and 11,880 Yen plus tax for the limited edition 765 Pro New Produce Box. So, with the 8% tax, it costs about 8210 Japanese Yen for the normal one and 12,830 Yen for the limited edition. 8,210 Japanese Yen for a PS3 game in Japan? With an equivalent of about 83 US Dollars, buying a new video game in Japan seems costly now that the 8% hike is implemented.

You get the idea but if you're a foreigner who want to take a break in Japan, best be warned that with the 8% hike in sales tax, your single 100 yen coin is no use like what one penny is on American soil. Let's hope you got enough pocket money before your trip and make good use of those money exchange but for a recommendation, best to have about 200 US Dollars before you set off and when exchanged, you have about 20,600 Yen in your allowance...as a theory but still more is best when you set off because...what are you going to buy when you're in Japan? It's your money so decide well because with the 8% hike, your decisions have been shorten threefold.

I'm just saying but if you want to survive in Japan in the midst of the 8% tax hike, heed my advice and stay safe when you're out there. Gosh, I'm already getting myself a financial headache right now. Gonna get some rest right now but I hope you remember about surviving Japan in an 8% sales tax!

Good Luck!

No comments:

Related Posts Plugin for WordPress, Blogger...

Ask comments and questions here!