Foreign residents in Japan should prepare for significant tax changes in the coming months, as the government moves forward with reforms affecting gasoline prices, international travel costs, and income tax thresholds. These changes, announced on November 13, 2024, will impact daily expenses and financial planning for expats living in Japan. Starting November 13, the government has begun expanding subsidies to oil wholesalers as part of preparations to abolish the provisional gasoline tax rate in December, according to NHK. This temporary tax, which has been in place for decades, adds approximately 25.1 yen per liter to gasoline prices. The phased subsidy increase aims to cushion the transition and prevent sudden price fluctuations at the pump. For foreign residents who drive regularly, this change could provide modest relief at gas stations, though the exact impact on retail prices will depend on how wholesalers pass along the benefits to consumers. The government's gradual approach suggests authorities are cautious about market disruptions during the transition period. However, international travelers face increased costs as the Liberal Democratic Party's Tourism Nation Research Committee has proposed raising the exit tax from 3,000 yen to 5,000 yen, NHK reported. This tax, officially called the International Tourist Tax, is charged to all passengers departing Japan by air or sea, regardless of nationality. The proposed increase, which would take effect in the next fiscal year pending approval, represents a 67% hike in departure costs. For expats who travel frequently for business or personal reasons, this means an additional 2,000 yen per trip. The committee cited overtourism concerns as justification for the increase, suggesting the additional revenue will fund tourism infrastructure improvements and visitor management measures. Perhaps most significantly for working expats, the government is actively discussing reforms to income tax thresholds, commonly referred to as the "income wall." According to NHK, both the Liberal Democratic Party's Tax Research Commission and the government's Tax Commission held meetings on November 13 to discuss raising these thresholds. The government's expert panel specifically recommended using the Consumer Price Index as a benchmark for adjusting the income thresholds, reflecting concerns about inflation eroding purchasing power. Currently, Japan's tax system includes several critical thresholds that affect take-home pay. The basic deduction threshold of 1.03 million yen annually determines when income tax obligations begin, while the 1.3 million yen threshold affects social insurance enrollment. Many part-time workers, including expat spouses, strategically limit their earnings to stay below these levels. The proposed reforms could raise these thresholds, potentially allowing foreign residents to earn more without triggering additional tax burdens or losing dependent status benefits. The timing of these discussions is significant, as they form part of year-end tax reform negotiations that will shape the fiscal 2025 tax code. The LDP Tax Research Commission indicated it would continue examining not only income tax thresholds but also special taxation measures for corporate taxes, suggesting broader reforms are under consideration. For foreign residents, these changes present both opportunities and challenges. Lower gasoline costs could reduce transportation expenses, while higher exit taxes will increase travel budgets. The potential income tax reforms, if implemented favorably, could provide the most substantial benefit by allowing households to earn more without tax penalties. Expats should monitor these developments closely as details emerge. The income threshold changes, in particular, could significantly affect household financial planning, especially for families with one primary earner and a spouse working part-time. As these proposals move through the legislative process, foreign residents should consult with tax professionals to understand how the changes will affect their specific situations and adjust their financial strategies accordingly.