Nissan Motor is no longer eligible for a tax break supporting companies that raise wages, after the automaker underpaid its contractors by about ¥3 billion ($20 million), the Yomiuri Shimbun said.
Inability to apply for the tax break may weigh on the carmaker’s earnings this year, the Yomiuri said. Nissan’s name has been removed from a list of around 44,000 companies eligible for the tax incentive on the economy ministry’s website. Once removed, companies lose eligibility for one year, the paper said.
The Japan Fair Trade Commission reprimanded Nissan last month, saying it systematically lowered pay to 36 suppliers from January 2021 to April last year. Nissan’s violation of Japan’s Subcontract Act came to light as Tokyo lobbied companies to increase salaries and help workers cope with rising prices.
The tax breaks were first introduced in fiscal 2013, and Prime Minister Fumio Kishida’s administration expanded it to encourage companies to raise wages, the paper said.