The government plans to introduce a system giving a 5 percent point rebate to people who make purchases using credit cards or other cashless methods. | BLOOMBERG

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Government plans 5% rebates for some cashless payments after 2019 tax hike

Kyodo

The government plans to give a 5 percent reward-point rebate to consumers on some payments made through credit cards and other cashless methods as a way of underpinning domestic demand after a planned tax increase next October, officials said Thursday.

The special measure, expected to last for roughly nine months until the 2020 Tokyo Olympics, was expanded from an earlier plan to implement a 2 percent rebate program.

Fumio Kishida, policy chief for the ruling Liberal Democratic Party, told reporters that Prime Minister Shinzo Abe had informed him of the plan.

The rebate will be handed out in the form of reward points rather than cash, and it will not apply to payments made at large store chains, according to officials with knowledge of the plan.

The move is part of a series of steps the government plans to take to ensure that raising the consumption tax from the current 8 percent to 10 percent will not put the brakes on economic activity.

The government plans to set aside a total of around ¥2 trillion in the fiscal 2019 budget for such measures, which also include shopping vouchers with enhanced purchasing power for households with low income or children under 2 years old.

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