Major Japanese travel agency JTB Corp will reduce its capital to 100 million yen, making it eligible to gain a tax advantage accorded to small and medium-sized companies amid the coronavirus pandemic, sources close to the matter said Tuesday.
The planned capital cut from over 2.3 billion yen would mean JTB can receive preferential tax treatment for smaller companies with 100 million yen as the upper limit for capital. A capital of 100 million or less is the corporate threshold for small and medium-sized companies.
The reduction was approved on Feb 12 at an extraordinary general meeting of JTB's shareholders and will be effective on March 31.
According to the sources, JTB sees the move as restoring its financial soundness at a time when it is facing a severe business environment due to the sharp pandemic-induced decline in travel demand.
JTB posted a record net loss of 78.17 billion yen for the April-September period and will reduce its global workforce by 6,500 under broad restructuring.
Although JTB is unlisted, it is a large corporation with sales of 1 trillion yen and more than 20,000 group employees.
In 2015, electronics maker Sharp Corp was considering cutting its capital to 100 million yen, but eventually gave up the plan following government criticism that it was attempting to ease its tax burden.© KYODO