Consumption tax will be raised in staggered stages of 8% in April 2014 and another 10% in October 2015.
Parliament passed the sales tax hike bill with strong support from Prime Minister Yoshihiko Noda, and was an urgent response to stem the nation's spiraling debt situation that forced Fitch to cut its sovereign rating last month.
Here's more from BK Asset Management:
After the close of the market yesterday Prime Minister Yoshihiko Noda's bill to hike Japan's sales tax passed the lower house of parliament following a long battle for supporters. Under the bill, there are two stages of increases that begins with the consumption tax rising to 8% in April 2014, and then to 10% in October 2015.
Parliament extended the current session to September 8 to allow party leaders' effort to bring anti-tax lawmakers. The IMF and Organization for Economic Cooperation urged Japan to be more aggressive in tackling their debt as the OECD forecasted a debt rise of 223% of GDP. With Fitch cutting the country's sovereign rating in May, Noda has a lot of pressure to reduce the nation's debt levels.
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