The Japanese government has plans to introduce corporate tax refunds as part of its relief measures to help businesses that have been impacted financially by the coronavirus outbreak.
Lawmakers are in the process of developing an emergency economic package to sustain corporate finances and reinforce the Japanese economy as the virus spreads around the world affecting all global economies.
Who can avail of corporate tax refunds?
The refunds are aimed at small- to medium-sized companies, such as restaurants and school lunch providers, as well as larger companies that would not normally qualify for tax reliefs.
Restaurants and music club owners who have had to disinfect or renew facilities, where customers were found to be infected with the COVID-19 virus, are also eligible to apply for tax refunds
However, a reduction in company sales because of the outbreak does not qualify a business for a refund.
Expanding a one-year grace period for corporate tax payments for companies is one of the additional measures under consideration
Additional relief measures under consideration
On top of the tax refunds, the government is also considering extra tax reliefs for any small- and medium-sized businesses and individuals affected by the outbreak in its new emergency package.
Expanding a one-year grace period for corporate tax payments for such companies is one of the additional measures under consideration. Under the current system, a firm applying for a one-year grace period must have collateral to cover the amount of tax it owes.
Some policymakers and officials have also suggested allowing a reduction or exemption in property taxes, or reducing the consumption tax, which was increased from 8 to 10 per cent last October.
The government has approved about ¥1 trillion for its emergency package to help businesses hardest hit by the COVID-19 crisis with ¥500 billion in zero-interest loans for those small- and medium-sized companies experiencing cash-flow problems.
The stimulus measures also include ¥430.8 billion in spending under the fiscal 2019 budget.
Households to be included in the emergency package
The government is also factoring in a plan to inject some cash into households that have suffered as loss of income due to redundancies as a result of the coronavirus pandemic.
For consumers, the relief package is set to include cash payments to affected households. The government is aiming to make these payments in May. The amount of money people would receive has not yet been confirmed but it is suggested that it could be around ¥200,000 per household, according to sources.
What do you think of the relief measures that have been suggested? Let us know your thoughts in the comments.
"Otsumami" - a bite size snack:
In these unprecedented times, the government must do everything it can to save businesses and individuals from bankruptcy.