Nissan Loses Japan Tax Break Eligibility Amid Payment Controversy

Nissan Motor Co. has been stripped of its eligibility for a tax break aimed at promoting wage increases in Japan after facing criticism from an antitrust watchdog for reducing payments to subcontractors, as reported by Kyodo News.

The action against Nissan comes at a time when the government is urging companies to increase wages to mitigate the impact of rising prices. I Photo: Nissan

The Japanese government removed Nissan from the list of companies eligible for the tax break following a warning issued by the Japan Fair Trade Commission.

The commission found that Nissan had unlawfully reduced payments to 36 subcontractors, totaling over 3 billion yen ($20 million) over two years, in violation of subcontracting laws.

This reduction was deemed an abuse of Nissan's dominant position in the market.

The government requires major companies like Nissan to commit to fair business dealings with subcontractors when applying for the tax break. Once delisted, companies cannot reapply for eligibility for at least a year.

The action against Nissan comes at a time when the government is urging companies to increase wages to mitigate the impact of rising prices. Despite reaching wage agreements with its union, Nissan's actions have drawn significant scrutiny from regulators and the public alike.

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