The consumption tax increase next April will hit every household in Japan hard, with many people¡¯s financial future hanging on whether their wages rise enough to offset the impact of the hike, experts say.
The sales tax hikes ¡ª to 8 percent in April 2014 and then to 10 percent in October 2015 ¡ª will deal a much heavier blow to individuals and families than the previous tax hike, in 1997, when the rate went to 5 percent, up from 3 percent, according to Rei Tsuruta, manager of the economic research office at Bank of Tokyo-Mitsubishi UFJ.
The ?5 trillion economic package Prime Minister Shinzo Abe¡¯s administration unveiled Tuesday to mitigate the impact of the tax hike is aimed at ¡°spurring corporate business activity so corporations can raise wages, rather than aiding households directly,¡± Tsuruta said.
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