Japan Press Weekly

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2014 February 26 - March 4 [POLITICS]

Refunds to large exporters make a big dent in sales tax revenues

Due to the huge amount of refunds of the consumption tax given to large export companies, tax offices in cities they are based in suffer deficits in the balance of consumption tax payments.

This was revealed by a National Tax Agency official’s response to Japanese Communist Party House of Representatives member Sasaki Kensho at a House financial committee meeting on February 26.

The government refunds to large exporters the consumption tax for their purchases. In the meantime, large manufacturers can often avoid paying smaller companies and subcontractors the consumption tax by keeping down the unit prices paid for parts.

According to the National Tax Agency, Toyota City in Aichi Prefecture, where Toyota Motor has its headquarters, had the largest amount of deficit in consumption tax payments in FY2011. While the tax payments the local tax office received were 26.6 billion yen, it had to refund 136 billion yen in the consumption tax, leading to 109.2 billion yen in deficit.

The second largest amount of deficit was 44.9 billion yen in Yokoyama City in Kanagawa Pref., which hosts Nissan Motor’s head office. It is followed by Hiroshima’s Kaita Town hosting Mazda Motor (26.7 billion yen) and Osaka’s Osaka City hosting Sharp Co.(13.8 billion yen).

Past related articles:
> Exporters’ way of making money from consumption tax [May 25, 2012]
> Unfair taxation: heavier burden on SMEs, more benefits for large firms [February 27, 2011]