My Number system to be used for sales tax refunds when levy hiked to 10%

JIJI, Kyodo

The Finance Ministry is planning to tap into the new My Number ID system as a way to provide consumers with refunds on certain goods when the consumption tax is hiked from 8 percent to 10 percent in 2017, sources said.

Under the ministry’s plan, consumers would be required to pay the 10 percent tax rate on all goods, but would be eligible for refunds on the 2 percentage point tax hike portion for some products.

The reduced tax rate of 8 percent would be applied to all food and beverage items, except alcoholic drinks, when the tax rate is increased to 10 percent in April 2017.

To facilitate the refund, people would present their 12-digit My Number card, which will be distributed to all residents in Japan from next January, to make purchases.

The government would then use My Number to collect and store purchase data, while taking strict information protection measures to prevent personal data leaks, the sources said.

Names, addresses and birthdate information on the cards, which have been created as part of a centralized system for tax and social security, would not be read, the sources added.

Purchase data would be converted into points, with consumers required to go online to determine how much they will receive in refunds from their points.

They would then need to apply for a refund, which would be deposited into a pre-registered bank account.

Finance Minister Taro Aso said the ministry aims to put emphasis on assisting low-income earners, saying it intends to set upper limits on the tax refund in accordance with the amounts purchased by consumers. Some sources said the refund cap is likely to be at least ¥4,000 per person for a year.

The ministry presented the scheme to the ruling bloc of the Liberal Democratic Party and Komeito on Tuesday.

The two parties are hoping to work out details by the end of the year, when they will adopt a tax reform package for fiscal 2016 from next April.

But there are some hurdles in introducing such a system, as retailers selling food and beverages need to install terminals to read shopping information, which would likely cost time and money.

During discussions held by senior lawmakers of Komeito, some expressed concern over utilizing the My Number system, according to sources close to the meeting.

Sadayuki Sakakibara, chairman of Keidanren, which opposes selling certain goods with a reduced tax rate, said the ministry’s scheme was worth considering.

The tax shortfall resulting from the refunds is estimated to be about ¥1.3 trillion a year, according to the ministry, with the ruling parties needing to secure financial resources to meet the gap.

  • Firas Kraïem

    What is this nonsense? Why can’t they just not increase the price of those items?

  • President Grace 2016

    my head hurts while reading this. i need stronger coffee.

  • goseki

    consumption tax should apply to everything .. sure it takes a little time to adjust to new prices, but to introduce some sort of exemption system or worse rebate system such as this .. borders on stupidity.
    If you raise these taxes you need to balance it with a decrease in income tax.
    10% is a nice sensible level to use.

  • Jay

    Dumb, dumber, and dumbest. Hugely complicated, but also downright scary: a digital monitoring system for your every shopping visit? Then how will consumers get the rebates? Only by registering their banking information with Big Brother, who will periodically make a deposit?

  • Roy Warner

    In other words, with My Number, the government will know everything you buy in addition to every time you visit a physician and for what ailment. The administration of this rebate system will cost much of the revenue to be gained by the increase and personal information will be at risk no matter what kind of encryption system is implemented. Why not raise income taxes instead?

  • Doubting Thomas

    It boggles the mind that they saw how badly going from 5 to 8% hurt the economy, but still plan on going to 10%. This is insanity. Consumption tax hikes only effect low-income families. They need to increase the cost of a pack of cigarettes to 1000 yen, increase marginal tax rates on the hyper-rich, tax stock trades (by a tiny, tiny percentage), and cut government waste if there’s a tax shortfall.

  • jcbinok

    A double whammy from the government: “Pay more taxes and give us more personal info to get a little cash back.” If I could vote in this country, I would vote for any politician who opposes this bill.

  • GBR48

    Ridiculously complicated. Huge implementation expenses for a miserly cash-back, extra tech and longer queues.

    Double consumption tax and zero rate all food and non-alcoholic beverages.


    The best idea to make sure a very tiny % of people will ever apply for refund.

    Also, the best way to know what people are buying, and when and where people are going shopping…
    I wonder how much the government will spend on all this system (to start it, but then also annually to “make it work”, when they actually are complaining about the shortage of tax income already…
    As we say in France: this is a “Usine à gaz” (a gas factory), meaning it produces more waste than effective products.
    And also, finally, the hike of taxe rate on food is insane when one already knows how expensive fruits and vegetables are in Japan, compare to anywhere else in the world.

  • qwerty

    i speak well my lord, shore

  • qwerty

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  • qwerty


  • qwerty

    i wanna