Cabinet OKs bill to ban sales tax hike discounts


The Cabinet at a meeting Friday adopted a bill banning major retailers from advertising price discounts in the lead-up to the planned sales tax hike in an attempt to return extra tax payments to shoppers.

The move follows government concerns that such campaigns by large retailers would put pressure on small wholesalers not to raise prices after the tax is increased to 8 percent from 5 percent in April 2014, and then to 10 percent in 2015.

The government aims to pass the bill, designed to make companies pass on the tax rise in the prices of their products and services, during the ongoing Diet session through June.

The bill would ban large companies from rejecting moves by small and midsize firms to pass on the higher tax in their prices. It also would allow the Fair Trade Commission to order offenders to take corrective measures and for the firms’ identities to be disclosed.

To mitigate retailers’ extra clerical work stemming from the two-stage tax hike, the bill would permit price tags to show tax-exclusive prices along with the amount of tax for a certain period, easing the rule that obliges retailers to show prices including taxes.