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Act on Special Measures for Productivity Improvement Enforced

June 6, 2018

On June 6, 2018, the Act on Special Measures for Productivity Improvement came into force. The Act stipulates provisions for: [i] establishment of a project-based system called a “Regulatory Sandbox,” [ii] tax breaks for encouraging IoT investment for facilitating data sharing or collaboration, and [iii] encouraging SMEs to invest in business facilities to improve their productivity.

1. Purpose of the Act

As information technologies (e.g., IoT, big data, and artificial intelligence) have rapidly generated innovations in the last few years, industrial structures and international competition are experiencing disruptive changes. To address these changes and lead global economies by realizing a productivity revolution, the Cabinet approved a New Economic Policy Package in December 2017.

In this policy package, the government decided to take all necessary efforts to implement necessary policies leading up to FY2020, “A period for productivity revolution and intensive investment”. In light of this, under the Act, Japan will take measures to help Japanese industries dramatically improve their productivity.

2. Outline of the Act

  1. Establishment of a project-based system called “Regulatory Sandbox”
    The Act is to develop an environment in which businesses are able to conduct demonstration tests and pilot projects for new technologies and business models that are not envisaged under existing regulations with a limited number of participants and within the predetermined implementation periods. This environment will allow businesses to conduct demonstration tests and pilot projects quickly and collect data that may contribute to regulatory reforms.

    A consultation counter will open on June 6, 2018, to provide preliminary consultation and accept requests involving the system in an integrated manner. For more information, visit the website opened by the Cabinet Office below.

  1. Tax break for IoT investment to facilitate data sharing or collaboration
    The Act is to establish a certification system for business plans that aim at data sharing or collaboration, allowing certified business operators to take advantage of tax breaks and other measures for investing in facilities, equipment and so on used for efforts stipulated under the Act. In addition, the Act is to establish new procedures in which data sharing business operators who receive confirmation in terms of predetermined levels of cyber security, are eligible to request that the government, independent administrative agencies and other public entities provide them with necessary data.

    For related documents, visit the following website.

  1. Encouraging SMEs to invest in business facilities to improve their productivity
    The Act is to take measures to support SMEs in introducing facilities and equipment with cutting-edge technologies under business plans certified by the municipalities where the SMEs are located, thereby accelerating regional investment in facilities and improving the productivity of local businesses.

    For related documents, visit the following website.

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