Japan plans to refund taxes to companies affected by Covid-19

Japan plans to implement corporate tax refunds for companies that were forced to suffer losses due to the outbreak of the new coronavirus, a government source said on Saturday.

The measure would apply mainly to small and medium-sized companies, such as restaurant operators and school lunch suppliers, as well as large companies that are not normally eligible for this tax benefit, the source said.

Prime Minister Shinzo Abe's government will also allow business operators to speed up procedures for requesting tax refunds, the document said.

Together with an emergency economic package to be drawn up next month, the government plans to support corporate finance and strengthen the Japanese economy as the spread of the pneumonia-causing virus appears to significantly affect global growth.

With the planned tax refund, the government plans to help catering companies that were forced to discard food for school lunches following Abe's request for schools to close from the beginning of this month until the end of spring break in early April.

Restaurant and music club owners can also request tax refunds due to losses in disinfection and renovation costs, if customers are found to be infected with the virus.

However, a drop in sales per se will not qualify a company for reimbursement, if it results only from the economic consequences, according to the source.

In addition to reimbursements, the government is considering separate tax measures for small and medium-sized businesses and affected individuals as part of the new emergency package.

Some lawmakers and officials advocated a possible reduction or exemption from property tax, or a cut in consumption tax, the rate of which was raised from 2 percentage points to 10% in October.

On March 10, the government adopted a new emergency package of around 1 trillion yen (US $ 9,6 billion) for companies hit by the viral outbreak, presenting 500 billion yen in interest-free loans to small and medium-sized businesses with little money.

The stimulus measures also involve 430,8 billion yen in real spending in the 2019 fiscal budget.

Source: Mainichi

0 0 vote
Article Rating
Notify of

This site uses Akismet to reduce spam. Learn how your feedback data is processed.

Inline feedback
View all comments