Retailers in Japan Choosing to Become Smaller for Point Program
Tokyo, May 29 (Jiji Press)--Retailers in Japan are increasingly opting to become smaller in terms of equity capital, in an effort to make them able to provide points to customers when the consumption tax is raised in October.
The Japanese government plans to introduce a point program in October when it raises the consumption tax from the current 8 pct to 10 pct. Under the program, which will be in place for nine months, shopping points worth 5 pct of the purchases for cashless payments, will be provided.
Retailers will be eligible for providing points under the program if they are small or midsize firms with a capital of 50 million yen or lower. The industry ministry is not blocking an attempt by retailers to reduce their capital to use the program. "Capital policies are up to the firms," a ministry official said.
In the supermarket industry, Sunny Mart Co., based in the city of Kochi, southwestern Japan, reduced its capital from 98 million yen to 50 million yen in May, while Yaomasa, based in Odawara in Kanagawa Prefecture, south of Tokyo, plans to cut its capital from 100 million yen to 30 million yen in June.
Both companies said their capital reductions are designed to become eligible for government support for smaller firms, and not just for the point program.
[Copyright The Jiji Press, Ltd.]