The government is set to impose the consumption tax on online content purchased from overseas vendors by making them register with Japanese authorities, officials said Wednesday.
Japan currently levies the tax on Internet sales of electronic books, music and other content only when the transactions involve domestic businesses, triggering calls from the Japanese firms for a level playing field with foreign rivals such as Amazon.com.
Ahead of the tax increase planned for April 2014, the Finance Ministry has studied how to improve the collection system, mainly focusing on overseas vendors, and is expected to take hints from the method employed by the European Union.
Domestic vendors argue that they won't be able to survive harsh price competition with overseas rivals unless the Finance Ministry plugs the tax hole. The sales tax will be raised to 8 percent in April 2014 and then to 10 percent in October 2015.
The ministry is planning to present the government's tax panel with specific proposals soon, which may require some legal revisions, the officials said.
Japan's e-book market remains largely untapped, and U.S. online shopping giant Amazon Inc. has recently announced plans to launch a Japanese-language version of its popular Kindle tablet computer.