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Bill passed to prevent pressuring of small firms after sales tax hikes


The House of Representatives passed a bill Friday to prevent larger companies from pressuring subcontractors not to pass on higher taxes in transactions following the planned sales tax hikes starting next year.

The legislation is likely to be enacted during the ongoing Diet session ending next month after a vote by the House of Councillors.

It would also prohibit retailers and manufacturers from absorbing the sales tax increases.

The government plans to raise the consumption tax rate from 5 percent at present to 8 percent next April and 10 percent in October 2015.

Under the legislation, effective through March 2017, the Japan Fair Trade Commission would issue advisories if it finds any violations.