There have been consistent rumors that the 10% consumption tax with cashless point rewards due to start in October was going to be spiked. Now that there are rumors of a ‘double’ election this summer, and especially after President Trump mused about scrapping the whole postwar American-Japanese defense treaty system, I think we can safely assume the 10% consumption tax is never going to happen. Prime Minister Abe can have a tax increase or he can change the constitution. He can not do both, and no politician is going to support the tax increase publicly going into the summer election, even thought the Komeito is said to want it enacted.
So who are the losers? Well, Komeito for one which the Abe government needs sidelined in order to amend the constitution, and Rakuten for another as they were hoping to ride the cashless point reward with consumption tax wave. Buckle up everybody, it’s going to be a long hot summer with lots of political debate over the constitution and Japan Self-Defense Forces.