TOKYO: Nissan Motor Co. has been removed from the list of companies eligible for tax breaks that are granted to those implementing wage hikes, following the revelation of the automaker’s unfair reductions of payments to its suppliers, it was learned Saturday.

In order for companies to be eligible for the tax breaks, they need to announce a declaration vowing to achieve fair transaction prices on a dedicated website created by the Japanese government and others.

Nissan withdrew its declaration after the Japan Fair Trade Commission in March this year said that the automaker had unfairly reduced payments by a total of around 3 billion yen to 36 suppliers, in violation of the subcontract law.

This meant that Nissan was no longer eligible for the wage hike tax breaks and cannot get the breaks for at least a year.

The tax system to promote wage hikes was expanded under the fiscal 2024 tax system reform, with large companies receiving a corporate tax deduction of up to 35 pct of its salary increases.

Nissan implemented a 3.4 pct wage hike in fiscal 2023. In this year’s “shunto” spring labor-management wage negotiations, the automaker agreed to raise wages by 5 pct.

JIJI Press