Diet bans discount sales linked to tax hike

JIJI

The House of Councilors passed into law Wednesday a bill banning advertising discount sales that are overtly designed to offset the impact of the 2014 and 2015 hikes in the consumption tax.

The bill received plenary session approval chiefly from the ruling Liberal Democratic Party and its ally, New Komeito, as well as from the Democratic Party of Japan.

Under the temporary law, which will expire at the end of March 2017, retailers must raise their prices to reflect the hike in the consumption tax.

The 5 percent tax will be raised to 8 percent next April and to 10 percent in October 2015.

Policymakers worry that discount sales directly linked to the tax hikes could leave small and midsize wholesalers facing pressure from large-scale retailers not to raise their prices after the levy is raised.

To protect such wholesalers, the law prohibits any overt advertising of price cuts designed to counter the impact of the tax hikes.

Following the enactment of the law, the government began creating a list of acts prohibited under the law, including advertising discount sales and asking wholesalers not to raise prices.

The government plans to increase the number of staff at the Small and Medium Enterprise Agency to boost its supervision.

Infrastructure fund OK

The Diet passed a bill Wednesday to revise the law on the so-called private finance initiative and provide for a public-private fund to financially support the infrastructure development drive.

The Upper House passed the bill by a majority vote in a plenary session with support mainly from the ruling camp led by the Liberal Democratic Party. The bill earlier cleared the Lower House.

The revised law calls for establishing the fund to invest in or lend to private-sector operators of such social infrastructure as airports and water and sewerage systems. The Cabinet Office aims to launch the fund in September.