Diet OKs sales tax hike delay to October 2019
TOKYO — The Diet on Friday approved pushing back a planned hike in the consumption tax from April 2017 to October 2019.
The revised tax-related bills were approved in the House of Councillors with the backing of the ruling Liberal Democratic Party and its junior coalition partner, the Komeito party. They cleared the House of Representatives earlier this month.
With the tax hike delay, the introduction of related measures including exempting food items from the tax increase to 10 percent from the current 8 percent were also postponed by two and a half years.
Among other tax-related measures, the government will extend such tax relief programs as mortgage tax breaks.
Prime Minister Shinzo Abe announced the tax hike postponement in June, citing the need to spur the economy as part of efforts to mobilize all policy tools to avert another global economic crisis.
The revised bills stipulate that the tax exemption measures will be introduced in line with the consumption tax hike in October 2019 and the government will come up with ways to secure financial sources to make up for the loss resulting from lower state revenues by the end of the fiscal year through March 2019.
Business operators will use detailed invoices from October 2023 to account for the different consumption tax rates to be introduced. Between October 2019 and September 2023, simplified invoices may be used so businesses can prepare for the detailed accounting method.