Ministry of Economy, Trade and Industry
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Small and Medium Enterprise AgencyMarch and April are Campaign Months for Securing Smooth and Appropriate Transfer of Consumption Tax

In April 2014, the current consumption tax rate will be raised to 8%, but there is concern that many businesses may refuse to pay transferred consumption tax to contracting companies, etc., particularly in March and April this year. In response, the Ministry of Economy, Trade and Industry (METI) decided to launch a campaign, titled “Campaign Months for Securing Smooth and Appropriate Transfer of Consumption Tax”, which will continue for the duration of these two critical months. Jointly with the Japan Fair Trade Commission (JFTC), METI will enhance monitoring efforts to uncover any violations of the Act on Special Measures Concerning Proper Transfer of Consumption Tax (hereinafter referred to as the “Act”) and enhance efforts to police such actions, as well as raising public awareness of tax transfer and providing businesses with consultation services, with the goal of preventing refusals to pay transferred tax and swift corrections to violations of the Act.

METI has requested that industry associations secure smooth and appropriate transfer of consumption tax. In addition, METI, jointly with the JFTC, conducted on-site inspections at 302 locations and instructed 853 businesses under the Act (Appendix 1(PDF:202KB) PDF File; in Japanese).

Concerning the consumption tax hike to be introduced in April 2014, there is concern that many businesses may refuse to properly pay transferred tax to contracting companies, through methods including reducing prices on products that will be traded with contracting companies from April and requesting that vendors engage in exchanging services for payment of the additional tax burden (including voluntary replacement of price tags in exchange for paying transferred tax burden, etc.), all of which may occur in March, and forcing such companies to accept reduced payment for products sold, or refusing payment of the increased amount of consumption tax to such companies, which may occur in April.

To address such concerns, METI decided to launch the campaign in March, 2014 (Appendix(PDF:157KB) PDF File; in Japanese), and will conduct the following full-fledged efforts in an integrated manner until the end of April, so as to prevent businesses from violating the Act.

  1. Enhanced monitoring and policing violations

    METI will enhance measures focusing on the buyer side, including requesting related industry associations and businesses to securely pay transferred tax to contracting companies and to ensure proper transfer of consumption tax, as well as revising guidelines for promoting fair subcontracting practices and raising public awareness of the guidelines. At the same time, METI will dispatch inspectors to monitor for violations of the Act to vendors (contracting companies), such as SMEs and micro enterprises, in order to provide such enterprises with careful explanation and consultation services.

  2. Conducting thorough surveys

    Aiming to uncover any cases of refusing payment of transferred consumption tax to contracting companies, in April 2014, METI and JFTC will jointly begin administering surveys to SMEs and micro enterprises in order to identify whether or not they are faced with refusal of payment of transferred consumption tax.

  3. Enhanced framework for raising public awareness and providing consultation services

    METI will also make efforts to raise public awareness of smooth and proper tax transfer by making use of posters and media, and organizing events at shopping arcades across Japan held by groups of officials.

In addition, METI will provide phone consultation services concerning the proper transfer of consumption tax every Saturday until mid-March and every Saturday and Sunday from mid-March to the end of April, so that businesses are afforded the opportunity to use this service on the weekends.

Release Date

March 12, 2014

Division in Charge

  • Competition Enhancement Office, Economic and Industrial Policy Bureau, METI
  • Fair Trade Division, Business Environment Department, Small and Medium Enterprise Agency
Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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