The Japan Chamber of Commerce and Industry on Thursday adopted a five-point emergency recommendation on economic policies for the government that includes a call for bold action to fight deflation.
The government should take decisive action, including cutting taxes and carrying out additional fiscal steps if necessary, the JCCI said in the recommendation, adopted at a meeting Thursday.
“The government should first overcome deflation and stabilize the economy,” the organization said. “Amid the prolonged deflationary economy, business at small and midsize companies that support the nation’s economy is being strongly battered.”
The four other points mainly call for help for small and midsize companies.
They include postponing a new corporate tax scheme that would allow levies on loss-making companies, not lowering the current sales threshold of 30 million yen a year, below which small businesses are exempt from paying consumption tax, and postponing the planned introduction in April of an insurance cap on demand deposits.
It also called for continuing the construction of necessary roads aside from the restructuring of road-related public corporations.
JCCI Chairman Nobuo Yamaguchi told the general meeting, “The government and the Bank of Japan should work in close coordination and take all possible fiscal, tax and financial steps.”
The organization has collected more than 4.55 million signatures from those opposed to the planned introduction of the new corporate tax, he added.
The government has been studying the new tax, which would be levied based on factors other than profits at companies as a way to achieve a fiscal balance with planned tax cuts as part of economic stimulus measures.
The JCCI opposes the new tax as it would directly hit small and midsize companies, of which some 70 percent are operating in the red.
It wants to keep the 30 million yen threshold under which businesses are exempt from paying consumption tax because if it is removed or lowered, it would affect an estimated 3.75 million small firms currently exempt.
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