Japan’s Finance Ministry is making plans to levy a consumption tax on goods sold online—e-books, music, and other products—from Internet vendors outside of Japan. This comes after last Tuesday’s Diet vote on an increase of the current five-percent consumption tax to ten percent by October 2015. As Japanese Internet companies are subject to the consumption tax, which has now been doubled, and foreign firms are not, the new tax on foreign Internet companies selling goods in Japan is apparently an attempt to ensure that domestic companies are not playing at a disadvantage on their home turf. Japanese Finance Minister Jun Azumi commented that fairness must be achieved when it comes to online content sales and taxation, otherwise domestic industries will look to move overseas. He also said that a panel would be set up to look into the matter.
With the announcement of the imminent release of Amazon’s Kindle, and Rakuten’s Kobo e-book reader also anticipated soon, Japanese e-book sales are expected to be taking off in the near future. With the rate at which Japanese consume print books, and the general love of gadgets in this country, it is likely that e-books are going to be a big business here, with players all over the world vying for a piece, and this Internet consumption tax is likely to become a contentious issue for foreign e-book sellers, not to mention other online retailers and digital content providers all wanting unfettered access to the world’s third largest economy.
Internet governance has been on the minds of Japan’s government a lot lately. Just last week Japan amended its copyright laws to impose stiffer penalties on online piracy. Intellectual property protection and regulating profits from Internet business and digital content distribution are issues governments around the world have struggled to deal with almost since the advent of the Internet, so it will be interesting to see how these laws pan out here, and inform Internet regulation around the world.[Via The Star]