On April 1, 2004, a new law came into effect, making it mandatory for all stores in Japan to include the 5 percent consumption tax on the prices shown on price tags. The new law will remove uncertainties regarding whether the tax is included on the price shown or not, and will make it easier for customers to calculate the total amount to be paid.
A 5 percent consumption tax is levied on virtually all goods and services in Japan. Until April 1, 2004, it was up to the stores to decide whether to include the tax in the prices shown or not. While most stores chose not to include the tax, some did. The consumption tax was introduced in Japan in 1989 at 3 percent, and increased to 5 percent in 1997.