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HOME  > Past issues  > 2012 May 23 - 29  > Consumption tax is unfair for small businesses: JCP Shiokawa
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2012 May 23 - 29 [FINANCE]

Consumption tax is unfair for small businesses: JCP Shiokawa

May 24, 2012
Japanese Communist Party representative Shiokawa Tetsuya on May 23 called for the cancellation of a consumption tax increase, pointing out that even at the present rate small businesses have difficulty in shifting the consumption tax onto their selling price.

Using his question time at a House of Representatives special committee meeting on an “integrated reform” of social services and the tax system, Shiokawa cited a survey showing that the smaller their businesses are, the more difficulties they have in passing the tax on their sales price in the face of shrinking consumer spending. The survey was conducted by four small business owners’ groups including the Central Federation of Societies of Commerce and Industry.

Shiokawa said, “Amid the decrease in workers’ income and the deflationary economic slump, most small retailers are reluctant to impose the consumption tax increase onto consumer prices. Subcontractors are in a very weak position and often hesitate to ask their parent companies to pay even the current 5% tax.”

Prime Minister Noda Yoshihiko agreed with Shiokawa.

The government official mentioned that the Fair Trade Commission is putting pressure on large corporations to pay the tax to their subcontractors.

Referring to the fact that retired Fair Trade Commission members obtained executive posts at major auto and home appliance makers, Shiokawa said, “The commission is ineffective in stopping large companies from abusing their position of power when doing business with small- and medium-sized companies.”
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