Small Firms Worried about Reflecting Tax Hike in Prices
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Tokyo, Sept. 24 (Jiji Press)--With a week to go before the planned consumption tax increase in Japan, small and midsize businesses and self-employed individuals are concerned whether they will be able to properly reflect the tax hike in prices.
Those businesses, while having to take into consideration consumer sentiment that is averse to price increases, also face the risk that prime contractors may force the tax hike burden onto subcontractors. The Japanese government will thus keep a close watch to prevent such unfair practices, officials said.
On Oct. 1, Japan's consumption tax rate will be raised from the current 8 pct to 10 pct.
A consumption tax is imposed on the difference between the purchase price and wholesale price at each stage of goods and services distribution, and is ultimately reflected in sales prices.
According to a survey by the Japan Chamber of Commerce and Industry released in August, some 32 pct of small and midsize companies said they would not be able to reflect all or part of the tax rate hike in their prices.
[Copyright The Jiji Press, Ltd.]