With the consumption tax rate set to rise in less than a month, the government must make sure the hike doesn't cause unfair transaction practices between large firms and their subcontractors and suppliers, or confusion on the part of consumers over changing ways of pricing.
The consumption tax rate, which will rise to 8 percent from 5 percent on April 1, is imposed on goods and services at each transaction stage. The added costs are passed onto the price at each stage and, ultimately, are shouldered by consumers.
When the tax rate last increased — from 3 percent to 5 percent in 1997 — some large businesses were reported to have taken advantage of their superior positions by effectively preventing their subcontractors and small suppliers from adding the tax increases to their prices.