KYODO NEWS - Mar 21, 2020 - 21:43 | All, Coronavirus, Japan

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

The measure would mainly apply to small and midsize companies such as restaurant operators and school lunch suppliers, as well as large companies that usually are not eligible for such tax relief, the source said.

Prime Minister Shinzo Abe's government would also enable business operators to expedite procedures for filing for tax refunds, it said.

Together with an emergency economic package it will draw up next month, the government aims to support corporate finances and bolster the Japanese economy as the spread of the pneumonia-causing virus appears likely to significantly affect global growth.

With the envisaged tax refund, the government plans to assist catering companies that have been forced to discard food for school lunches following Abe's call for schools to shut down from early this month through the end of a spring vacation in early April.

(Students head to an elementary school in Shizuoka, central Japan, on March 16, 2020, as some elementary and junior high schools in Japan resumed classes.)

Owners of restaurants and music clubs may also apply for tax refunds due to losses from the cost of disinfection and facility renewals if customers are found to have been infected with the virus.

However, a sales slump itself will not qualify a company for a refund if it stems only from the economic fallout, according to the source.

Aside from refunds, the government is considering separate tax measures for affected small and midsize firms and individuals as part of the new emergency package.

Some lawmakers and officials were advocating a possible property tax reduction or exemption, or a cut in the consumption tax, whose rate was raised by 2 percentage points to 10 percent in October.

On March 10, the government adopted a fresh emergency package of about 1 trillion yen ($9.6 billion) for businesses battered by the viral outbreak, featuring 500 billion yen in zero-interest loans for small and midsize companies falling short of cash.

The stimulus measures also involve 430.8 billion yen in actual spending under the fiscal 2019 budget.

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