Survey of Corporate Attitudes Toward Consumption Tax Rate Increase (2019)
44.1% of companies consider it should be implemented as scheduled, but antagonize those with negative views.
— About half of companies responded, “There will be no last-minute demand.” —
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. A reduced tax rate system will also be introduced upon this consumption tax rate increase. The possibility that impacts differing from those of the past consumption tax rate increases might appear has been pointed out.
Teikoku Databank has conducted a survey on corporate attitudes toward the Consumption Tax Rate Increase. This survey was conducted in conjunction with the June 2019 TDB Trends Research.
*Survey period: June 17 – June 30, 2019, Companies Surveyed: 23,632, Valid Responses: 9,977 (Response Rate: 42.2%). It is the 6th such survey on the consumption tax rate increase following those of July 2008, July 2012, August 2013, October 2014, and October 2018.
*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%, 44.1% 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” totaled 44.3%. Corporate views were polarized.
- 2 In terms of the impact on corporate activities, 50.8 % of companies responded, “there will be a negative impact.” By industry, the percentage of companies in “retail” was notably high at 78.4%, followed by those at over 50% in “agriculture, forestry and fisheries” (59.3%), “real estate” (54.2%), “wholesale” (53.5%), and “finance” (50.9%).
- 3 With respect to the response to the situation of last-minute demand, the percentage of those saying, “there is already last-minute demand” (7.4%) and those saying, “there will be last-minute demand” (23.1%) totaled 30.5%. Conversely, about half of companies responded, “there will be no last-minute demand” (48.2%).
- 4 40.4% of companies say they will “respond to” the reduced tax rates. Conversely, 49.3% of companies say they “will not specifically respond to the reduced tax rates.” The percentage tended to increase as company size decreased.