Oct. 2018
Survey of Corporate Attitudes Towards Consumption Tax Rate Increase (October 2018)
Polarized corporate view of consumption tax rate increase in October 2019
— Over 80% of companies in “Retail” concerned about negative impact —
Introduction
Although the consumption tax rate was supposed to be raised to 10% in October 2015 according to the Revised Consumption Tax Act of 2012, the consumption tax rate increase was postponed twice, in November 2014 and June 2016. Currently, the government says that the consumption tax rate will increase to 10% in October 2019, as scheduled. A reduced tax rate system will also be introduced upon this consumption tax rate increase. The possibility that different impacts from the past consumption tax rate increases might appear has been pointed out, and the government is also considering measures for alleviation of upheaval to suppress significant impacts on the economy.
Teikoku Databank has conducted a survey of corporate attitudes towards the consumption tax rate increase. This survey was conducted in conjunction with the October 2018 TDB Trends Research, and it is the 5th such survey on the consumption tax rate increase following those of July 2008, July 2012, August 2013, and October 2014.
*Survey period: October 18 – October 31, 2018; Companies Surveyed: 23,076; Valid Responses: 9,938 (Response Rate: 43.1%).
*Details of this survey can be found on the dedicated Economic Trend Survey HP. (http://www.tdb-di.com).
Primary points of survey results(summary)
- 1 With respect to the consumption tax rate increase to 10%, 43.3% of companies think that it “should be implemented as scheduled”. Companies that have negative views about the increase in October 2019 such as “postpone”, “remain unchanged”, and “reduce” also totaled 43.1%. These results showed polarized views.
- 2 In terms of the impact on corporate activities, combining those saying “negative impact (on business performance)” (34.2%) and those saying “negative impact (on other than business performance)” (20.9%), 55.1% of companies are concerned. In particular, those in “Retail” expecting a negative impact reached 81.2%.
- 3 With respect to the response to the introduction of a reduced tax rate, those saying “confirm the details of the reduced tax rate system” ranked top at 41.8%, followed by “confirm the paperwork that will have an impact” (36.7%), and “introduce, upgrade, or replace the accounting system, etc.” (23.5%).
- 4 Policies that companies want the government to preferentially work on are “economic measures”, prominently at 67.8%, followed by “measures for the declining birthrate” (37.3%), “enhanced and expanded support for SMEs” (33.2%), “fiscal reconstruction” (33.1%), and “tax reform” (32.7%) in the 30% range.