Arab News Japan
TOKYO: Opposition is growing in Japan to a new invoice system that starts from October 1 as opponents say it will hurt independent contractors and small businesses who operate on low profit margins.
The Qualified Invoicing System, which requires taxable businesses to issue invoices containing tax information for transactions, has generated massive opposition. A petition on Change.org to halt the regulation has received nearly 450,000 signatures.
Under the current system, people and businesses are exempt from paying consumption tax when dealing with tax-exempt businesses. However, this benefit will disappear after the invoice system is introduced. Also, these businesses cannot issue the required invoices. If a transaction is not issued an invoice, the transaction company will not be able to receive the tax credit. Starting Oct. 1, buyers must prove how much tax they paid to sellers with qualified invoices.
Historically, businesses with annual sales of under ¥10 million ($67,500) have been exempt from the consumption tax, but if businesses require qualified invoices and only registered businesses can issue them, tax-exempt businesses will be at a disadvantage.
Political opponents gathered in front the prime minister’s office in Tokyo demanding the government scrap the new system. Freelance operators such as animators, filmmakers, voice actors, manga artists and YouTubers are worried about their livelihoods. Effectively, the new law will mean a tax increase as those who were previously exempt will now be forced to pay the consumption tax, which currently stands at 10 percent and is likely to rise in the future.
The government wanted to introduce the qualified invoice system three decades ago, but a strong opposition movement managed to shut it down.
