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Small and Medium Enterprise Agency Announcement of METI’s Efforts regarding Measures for Securing Smooth and Appropriate Transfer of Consumption Tax as of the End of June 2016

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 June 2016.

  • 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 since April 2014. 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 June 2016, the SMEA and JFTC had provided instruction to a total of 2,844 businesses, requested action from five businesses, and sent recommendations to and disclosed the names of 33 businesses.
  • In the monthly monitoring survey concerning the smooth and appropriate transfer of consumption taxes (June 2016 survey), between 70% and 80% of the target businesses answered that all of the taxes had been transferred, while 4 to 5% answered that the tax had not been transferred at all.
  • The SMEA will continue to prevent refusal to transfer 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 June 2016, the SMEA and JFTC had provided instruction to a total of 2,844 businesses, requested action from five businesses, and sent recommendations to and disclosed the names of 33 businesses (figures are for the total number of cases the SMEA and JFTC dealt with; for details, see Appendix). The SMEA and JFTC will continue to strictly address such violations.
    • Following on from the FY2015 surveys, in FY2016, the SMEA has also been conducting full-scale written surveys (questionnaire survey sheets are scheduled to be distributed from July sequentially). Also, in addition to the written surveys, inspectors are patrolling certain areas and 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 June 2016, 83.0% of the target businesses answered that all of the tax was transferred for transactions between businesses, and 70.4% answered the same for transactions between businesses and consumers. Meanwhile, 4.0% of the target businesses answered that the tax was not transferred at all for transactions between businesses, and 5.7% 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
    • The SMEA has prepared about 1.6 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.
    • Four SME associations have opened 2,324 consultation counters to provide the public with face-to-face consultation services. As of the end of June 2016, about 1,820,000 cases had been accepted.
    • As of the end of June 2016, 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 490,000 people attending.
    • 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 link
Telephone: 03-3501-1502

Release date

July 27, 2016

Divisions in Charge

  • Fair Trade Division, Business Environment Department, SMEA
  • Competition Enhancement Office, Economic and Industrial Policy Bureau, METI
Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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