Business

Japanese government considers plan for 'premium vouchers' to underpin economy after tax hike

Kyodo

Low-income families may be able to purchase a voucher worth ¥25,000 for the cost of ¥20,000 under a government plan aimed at underpinning consumer demand after next year’s planned tax hike, sources said Wednesday.

The “premium vouchers” would be available to households with an annual income of up to ¥2.56 million, but the government may expand the scope of the plan to include those with an annual income of up to ¥5 million, the sources said.

Prime Minister Shinzo Abe last month reiterated his plan to raise the consumption tax from the current 8 percent to 10 percent as planned in October 2019, after postponing the hike twice due to concerns that it would hurt the economy.

The vouchers will be issued by municipal governments or local chambers of commerce but the ¥5,000 premium will be covered by the central government.

If the eligibility is limited to low-income households that are exempt from residential tax, the total government subsidy to be spent on the plan is estimated to be from ¥70 billion to ¥80 billion.

Separately, printing and distribution costs of the vouchers are expected to reach ¥30 billion, according to the sources.

Among other measures intended to support consumers, the government is considering offering 2 percent rebates in the form of reward points for purchases made with credit cards or other cashless payments.

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