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Small and Medium Enterprise AgencyAnnouncement of METI’s Efforts regarding Measures for Securing Smooth and Appropriate Transfer of Consumption Tax as of the End of December 2015

Following the rise in the consumption tax rate to 8% in April 2014, the Ministry of Economy, Trade and Industry (METI) has been conducting a variety of measures for ensuring the smooth and appropriate transfer of the increased consumption tax. METI hereby announces the compiled results of the specific measures undertaken for that purpose as of the end of December 2015.

The Small and Medium Enterprise Agency (SMEA), in conjunction with the Japan Fair Trade Commission (JFTC), has been conducting large-scale written surveys targeting small and medium enterprises (SMEs) and micro businesses. Based on the information obtained from such written surveys and other information, the SMEA and JFTC have been conducting investigations including on-site inspections. As of the end of December 2015, the SMEA and JFTC had provided instruction to a total of 2,398 businesses, requested action from five businesses, and sent recommendations to and disclosed the names of 31 businesses.
In the monthly monitoring survey concerning the smooth and appropriate transfer of consumption taxes (December 2015 survey), between 70% and 80% of the target businesses answered that all of the taxes had been transferred, while 4% to 6% answered that the tax had not been transferred at all.
The SMEA will continue to prevent the refusal to transfer the consumption tax as well as to strictly address violations of the Act on Special Measures concerning Proper Transfer of Consumption Tax* through the monitoring of consumption tax transfers and policing under the said Act.
*Note: Act on Special Measures for Correcting Conduct Obstructing the Application of Consumption Tax for Ensuring the Smooth and Appropriate Application of Consumption Tax

Outline of efforts

(1) Efforts to monitor and police violations

  • Inspectors to monitor buyers’ refusals to pay the additional tax have been dispatched.
    As of the end of December 2015, the SMEA and JFTC had provided instruction to a total of 2,398 businesses, requested action from five businesses, and sent recommendations to and disclosed the names of 31 businesses (figures are for the total number of cases the SMEA and JFTC dealt with). The SMEA and JFTC will continue to strictly address such violations.
  • Following the FY 2014 surveys, the SMEA has also been conducting large-scale written surveys targeting business operators such as SMEs and micro businesses in FY 2015 aiming to collect information concerning refusals to transfer the consumption tax. Also, in addition to the written surveys, inspectors are patrolling certain areas taking actions such as collecting information on refusals to pay the additional tax and providing counseling.
  • In April 2014, the SMEA instituted a monthly questionnaire survey for businesses concerning the current situation of consumption tax transfers, aiming to periodically ascertain the situation. In the written survey in December 2015, 84.7% of the target businesses answered that all of the tax was transferred for transactions between businesses, and 70.2% answered the same for transactions between businesses and consumers. Meanwhile, 3.9% of the target businesses answered that the tax was not transferred at all for transactions between businesses, and 6.2% answered the same for those between businesses and consumers.
  • As an enhanced guidance measure targeting buyers, the SMEA held explanatory meetings so as to inform related industry associations and businesses about the guidelines for promoting fair subcontracting practices that were revised to stipulate compliance for the smooth and appropriate transfer of consumption taxes.

(2) Efforts to raise public awareness and provide consultation services

Four SME associations have opened 2,324 consultation counters to provide the public with face-to-face consultation services. As of the end of December 2015, about 1,680,000 cases had been accepted.

  • As of the end of December 2015, 21,000 seminars concerning measures for securing smooth and appropriate tax transfers had been held at SME associations and government-approved support organizations, with about 470,000 people attending.
  • The SMEA has prepared about 1.09 million copies of guides and manuals to help the public easily understand such measures and has distributed them to businesses across Japan through SME associations and government-approved support organizations. In addition, in September 2015, the SMEA prepared pocket-sized brochures, in which matters including cases regarding the provision of instructions were described, as well as thoroughly revising the guides and manuals.
  • The SMEA has opened a consultation counter on the Internet for receiving public petitions with full consideration for security. Please take advantage of this website for consultation services concerning tax transfers. Note that the SMEA is still providing telephone consultation services.
    Consultation counter URL: https://www.shinkoku.go.jp/shinkoku/External Site Link (in Japanese)

Release date

January 18, 2016

Division in charge

  • Fair Trade Division, Business Environment Department, SMEA
  • Competition Enhancement Office, Economic and Industrial Policy Bureau
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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