Japan has raised its consumption tax for the first time in 17 years in an attempt to rein in public debt.
From Tuesday, sales tax will increase from 5% to 8%. It will rise again, to 10%, in October 2015.
Prime Minister Shinzo Abe said he would continue to take “necessary action” to address livelihood issues and keep Japan’s economy on track.
The stepped tax increases are aimed at covering rising social welfare costs linked to Japan’s ageing population.
Japan currently has one of the lowest birth rates in the world. It also has the world’s highest ratio of elderly to young people, raising serious concerns about future economic growth.