Tax in Japan Just Got A Bit More Taxing

Pardon my borrowing the pun from the old tax adverts, but I thought it was quite appropriate given the changes that have taken place over the past month.

In the UK, VAT is has been at 20% since January 2011, though for most of my life it had been 17.5% with the exception of a short window of being 15%. An American chap tried explaining their system to me but left me more confused about it than ever. Terrible explanation or terrible system, I don’t know, but that’s not what I’m going to write about today.

Back when I was here as an exchange student, and after moving here right up until last month, consumption tax (Japan’s equivalent of VAT) was 5%. Having grown up in a system where it was at least three times that, I didn’t think too much of it when it was announced that it would rise to 8%. Personally I can see and in a sense agree that it had to rise. But like I said, I always knew it to be a lot higher.

So what’s got me in a pickle? What’s got me just miffed enough to write a blog, but not so annoyed that I’ll actually do anything about it? It’s the fact that for the most part I have no idea how much anything costs!

Sad Hideyo Noguchi

Up until recently the price you saw on the label was the price including VAT, just like the UK. What you see is what you pay. It was a good system, a simple system. If something has a price of 5,000 yen, you gave the cashier 5,000 yen. Well … there were a few exceptions like computer shops which were just confusing and … you know what … another time.

But now shops have opted for one of two choices. The first of which is to show both prices, with and without tax. This is helpful because you can at least know what you’re paying before reaching the register. The price is 5,000 yen, with a little note next to it saying the price with tax is 5,400 yen. Still relatively simple, right? This system I don’t mind. Unfortunately many shops have opted for the second choice, including shops I go to regularly.

Showing the price with and without tax

The second choice is to just show the price without tax, with a little note next to it saying “plus tax”. Suck at maths? Too bad, you won’t know how much you’re paying until you hit the register. I loved maths at school and still occasionally (and nerdly) do algebra problems to kill time, but trying to work out 8% of a 487 yen item in your head is barmy … it comes to 526 yen by the way. To combat this I just add 10% and accept the fact that I’ll be overcharging myself.

I’ve only experienced this type of payment system once, when I was buying a DVD in Canada. I took the DVD to the register and almost had the right change in my hand ready. When I heard the actual price I was confused and taken aback. I asked why the price on display wasn’t the right price (at that time I was unaware of the “plus tax” system), and the cashier looked at me like I was nuts.

One reason I like knowing prices before reaching the register, rather than just wait (which is what I guess most people do) is so that I can have the money ready and don’t waste peoples time. As a cashier it’s annoying to tell the customer the price and have them fumble through wallets and purses while they first try and make the exact change then give up and pay with a high-note. The same goes for customers waiting in the queue. Do the world a favour people, get your money ready!

Hmm … I guess actually I do have one objection to the consumption tax going up. Shopping at the 100 yen shop has now become a lot more awkward.

Everything is 108 yen at the 100 yen shop!

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