The Japanese government will raise the rate of sales tax to 8% from April next year, from the current 5%. Many policy makers argue that the reason for the rise is due to reducing Japan’s public debt, which now stands around 230% of its GDP.The government intends to increase revenue in order to fund an ageing population by covering such welfare costs. The rise in tax can be seen as a long- term investment in maintaining the nation’s social security system. This would directly increase the sales of goods and services thus having a huge impact on consumers spending behavior. Although in the short run many consumers would not buy as many goods and services and have a knock on effect to business sales. Thus many companies need to focus on strategic planning and plan ahead in order to maximize profits. The macro economy has a huge impact on the business world therefore firms should consistently keep track of such government policies on a regular basis. Also I think that firms should invest in research and development efforts in order to project the demand after the increase in sales tax, so they know how much to produce without incurring waste.

http://www.bbc.co.uk/news/business-24343540