Business

Japan to promote tax hike preparations by small businesses

JIJI

The industry ministry will hold meetings in major cities in June to encourage small businesses to speed up their preparations for the October consumption tax hike, it has been learned.

The first gathering will take place in Tokyo on June 4. Participants are expected to include industry minister Hiroshige Seko and Japan Chamber of Commerce and Industry Chairman Akio Mimura, informed sources said.

At the planned meetings, leading figures in the public and private sectors will directly urge small-business owners to introduce cash registers capable of handling multiple consumption tax rates and cashless payment systems to allow their customers to receive government-funded rebates on their purchases.

Japan is scheduled to raise the tax rate to 10 percent from the current 8 percent for goods and services in October. Food and some other items are exceptions, with their rate to be kept at 8 percent.

Small businesses are lagging in preparations for the tax hike partly due to speculation that the increase may be delayed once again. Some analysts are speculating Prime Minister Shinzo Abe may call a double election in both parliamentary chambers in order to give the voters a chance to weigh in.

After the first event in Tokyo, meetings will be held by the end of June in seven other cities: Hiroshima, Osaka, Fukuoka, Sapporo, Nagoya, Sendai and Takamatsu, Kagawa Prefecture.

The ministry will brief small businesses on a program to grant reward points worth up to 5 percent of the purchases to consumers who make cashless payments, as well as on subsidies to those who replace or update their registers.

The number of businesses that need to replace or update registers is estimated at some 300,000 across Japan. Of them, only around 100,000 had finished such preparations by late April.

“The tax hike is stipulated in the law, so there is no change in the plan to raise the tax,” a senior ministry official said.