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When [Japan's consumption tax] was last increased in 2014, to 8% from 5%, smuggling of [gold] jumped as criminal organizations quickly realized how to game the system for their own enrichment.
The scheme works like this: Procure gold in places like Hong Kong, which does not tax it. Have mules hide it in their luggage and blend in with tourists, traveling to Japan to sell to stores that buy gold from the public. The stores pay for both the gold itself and the consumption tax. The tax component becomes pure profit.
And with the consumption tax set to rise to 10% in October 2019, margins will grow even fatter. Japan has an unflattering reputation as a "go-to place" for gold smugglers.
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[1] - https://asia.nikkei.com/Economy/Japan-braces-for-gold-smuggl...