The government has hired around 600 special investigators to prevent big businesses from passing the latest consumption tax increase on to their suppliers and contractors, but many small businesses are facing increasingly subtle billing and payment schemes from clients.
In Tokyo's Ota Ward, home to a cluster of small factories and workshops, the owner of a machine parts company recently said he experienced a request from a client, a major manufacturing company.
The parts maker was asked to "accept a 10 percent price reduction across the board," the president of the company said. If not, the client would switch suppliers, he was told.