Japan to review COVID-19 subsidies for businesses

Japan plans to review its COVID-19 subsidy programme targeted at small and medium-sized firms, according to Finance Ministry officials.

The programme may lead businesses to depend too much on subsidies and overinvestment, the officials said at a meeting of the Fiscal System Council, reports Nippon news. 

To support pandemic-hit firms, the subsidy provides a cap of 100 million yen (US$878,291) of support per recipient, aimed at covering up to 75% of costs needed for helping businesses reconstruct operations, such as winding up existing operations and entering new ventures. 

The government has set out 1148.5 billion yen (US$10.09 billion) under its third supplementary budget for fiscal 2020 for the subsidy programme, and has so far selected recipients for almost half of the funds budgeted under the programme. 

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At the peak of the pandemic in April 2020, businesses were struggling to keep afloat and had to retrench their workers. This was reflected in a surge in welfare consultations with local governments across the country, which saw an increase in the number of consultations for those who lost their jobs due to the pandemic.