What kind of taxes do the Japanese pay?
Taxes in Japan are classified into two categories: direct taxes imposed on one's income, and indirect taxes imposed on one's consumption and expenditures.
Direct taxes include income tax, corporation tax, inheritance tax, and donation tax.
Besides national taxes, local taxes are also imposed.
The 8% consumption tax is representative of indirect taxes which are levied on all goods.
Purchasers pay the tax to merchants, and then it is the merchants' responsibility to pay the collected tax to the state.
Direct taxes account for 67% of the 2003 tax revenues of Japan, whereas indirect taxes account for 33%.
In comparison with other countries, the ratio of direct taxes is higher in Japan and the United States; indirect taxes account for more than 50% in the United Kingdom, Germany and France.
It is feared that maintaining the social security system for the aging society in the 21st century will be impossible without raising the consumption tax.