Japanese government and retail businesses prepare for the consumption tax hike on Oct. 1.

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Recent Japanese corporate sentiment is cooling due to trade friction between the US and China.
In addition to the trade war, rising consumption tax rate to 10% scheduled in October is feared to be a further blow to the Japanese economy.
The consumption tax is believed to be hiked as planed as the government officially decided to raise it in June.
However, according to Tankan, a survey of corporate sentiment by the Bank of Japan made public on last July, the business conditions of large-scale manufacturing have deteriorated for the second consecutive year, and the economic outlook is unpredictable.
Under these circumstances, the Japanese government will provide point benefits to consumers when they purchase products, services etc. by cashless payments for nine months until June 2020, with the aim of preventing a drop in consumption after the tax increase and promoting cashless payments.


Payments by Credit card, electronic money and QR code using smartphones are rewarded with points equivalent up to 5% of the payments and the government will subsidize retailers for the point redemption.
Three major convenience stores, namely Seven-Eleven Japan, Family Mart and Lawson stores will offer a 2% discount rather than redeeming the points at a later date because they consider that discounting at the time of purchase would ensure consumer convenience and fairness.
Those convenience stores will replace the funds needed for the discount until they receive the subsidy from the government.
They consider the price discount is the best way for customers in regard to the fairness, convenience and affordability.
The introduction of a discount system at major convenience stores may prompt other retail businesses to offer a 2% discount of merchandise.

After the consumption tax increase, the tax rate will be reduced for daily necessities such as food purchases. The tax rate will be 8% for take-out food and 10% for in-store eating, so major convenience stores are also busy preparing for its publicity by displaying posters at each stores.










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