After the changes to the Japanese consumption tax take effect in October, how much tax will you have to pay on a hamburger?
The answer is that it depends. If you eat the hamburger in the restaurant then you will have to pay 10 per cent. If you buy the hamburger to go then you will only have to pay 8 per cent.
As far as I can understand the reasoning for this confusing system, the government wants to increase the tax rate from 8 per cent to 10 per cent in most cases, but it doesn’t want people to panic. “Oh, the tax rate hasn’t really gone up,” the government would like people to think. “I still only have to pay 8 per cent in some cases.”
This seems to have created an unnecessarily confusing system. What will MOS Burger do when a customer buys a hamburger to go, and then sits down and eats it in the restaurant? How confusing will their menus become when every item is listed with two prices?
The problem with a confusing tax system which has different tax rates for different people or situations is often practical. How do you check which category this customer falls into? How do you punish them if they try to claim the cheaper tax rate when they should be paying the more expensive one?
Recently I bought some special software for my computer which makes the computer usable by blind people. It is very expensive. I bought it from a store in the UK. Although we have to pay 20 per cent tax on goods bought in the UK (and you are worried about 10 per cent!), people who are registered blind don’t have to pay the tax. The government has created exceptions to our consumption tax (called VAT) which mean that you don’t have to pay the tax on items which are considered essential. So there is no consumption tax on babies’ nappies or eggs or milk, or on software designed for blind people which is bought by a blind person.
But that creates practical problems. How do you actually check that the customer is really blind? The answer is that the web-site just asks people who are buying the product if they are really blind. You don’t have to submit a doctor’s note or do an eye-test. You just choose the box marked, “Yes, I am blind.” The government has to trust people because there is no practical and easy way to check the information.
Maybe Japan should adopt a similar system for its confusing consumption tax. Really hungry people who need to eat a hamburger don’t have to pay consumption tax. People who are just eating a snack between meals have to pay 20 per cent. Sales staff could ask a few quick questions to decide which category a customer falls into. “What did you eat for breakfast this morning?” or, “You look a little fat – Why did you choose the double hamburger with egg topping?”
Vocabulary:
consumption tax – tax collected by the government when something is bought or sold
to buy something to go – of food, to buy something and not eat it in the restaurant
to punish someone – for someone in authority to cause harm to someone who has done something wrong, broken the rules, etc.
blind – having damaged eyesight or being unable to see
an exception – an unusual case; something which doesn’t fit into the usual pattern
essential – completely necessary; something which is needed
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