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Small and Medium Enterprise AgencyAnnouncement of METI’s March-April 2014 Efforts Regarding the Campaign Months for Securing Smooth and Appropriate Transfer of Consumption Tax

In response to the consumption tax hike in April 2014, the Ministry of Economy, Trade and Industry (METI) implemented a campaign, titled “Campaign Months for Securing Smooth and Appropriate Transfer of Consumption Tax,” in March and April 2014, and conducted measures to ensure smooth and appropriate tax transfer. METI hereby announces the compiled results of the specific measures undertaken for that purpose.

1. Outline

In response to the consumption tax hike in April 2014, there is concern that businesses may refuse to pay transferred consumption tax to contracting companies. To address this concern, METI has implemented the campaign, titled “Campaign Months for Securing Smooth and Appropriate Transfer of Consumption Tax,” in March and April 2014. During the campaign, jointly with the Japan Fair Trade Commission (JFTC), METI enhanced efforts for monitoring and policing violations as well as raising public awareness and providing consultation services, aiming to prevent refusals to pay transferred tax, and swiftly correcting any violations. METI hereby announces the compiled results of the specific efforts it undertook.

2. Results of the efforts

1) Enhanced monitoring and policing violations

METI and JFTC have been dispatching inspectors to monitor buyers’ refusals to pay transferred tax. Concerning the violations, as of the end of April, METI and JFTC provided instruction to a total of 1,218 businesses, and JFTC sent a recommendation to and disclosed the name of one business. METI and JFTC will continue to strictly address such violations.

In April, METI instituted a monthly questionnaire survey for businesses concerning the current situation of consumption tax transfers, aiming to periodically ascertain the situation. In the online survey in April, 79.4% of the target businesses answered that all of the tax was transferred for transactions between businesses, followed by 72.1% for transactions between businesses and consumers. Meanwhile, 3.7% of the target businesses answered that the tax was not transferred at all both for transactions between businesses and between businesses and consumers.

METI also started conducting a large-scale written survey for SMEs and small enterprises on the seller’s side as well as large retailers and large enterprises with a capital of 100 million yen or more on the buyers’ side of transactions, concerning the refusal of payment of transferred consumption tax to contracting companies.

Furthermore, METI has been having the inspectors patrol certain areas as part of a proactive approach to supporting any subcontracting SMEs and small enterprises. Specifically, by the end of April, it dispatched the inspectors to supermarkets and drugstores to provide 8,512 consultation services, and has been establishing a human network with management consultants in commerce and industry associations and chambers of commerce and industry.

As an enhanced instruction measure targeting buyers, METI required related industry associations and specific businesses to smoothly transfer consumption tax (about 1,000 cases). In addition, it will hold explanatory meetings so as to fully inform related industry associations and businesses about the revised guidelines for promoting fair subcontracting practices.

2) Further raising public awareness and providing consultation services

METI conducted 47 events, titled “Let’s talk about our lives and consumption tax at shopping arcades,” before the end of April to raise public and consumer awareness about the tax hike across Japan.

METI has produced about 180,000 posters aiming to inform the public of the increased tax burden and distributed them to businesses through SME associations and industry associations.

In addition, it opened 2,330 consultation counters at four SME associations to provide the public with face-to-face consultation services. Furthermore, the inspectors provided phone consultation services every Saturday and Sunday during April in addition to the regular weekday services.

For further details, see the Japanese language press release.

Release Date

May 13, 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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