05/05/2025

BIZ & FINANCE MONDAY | MAY 5, 2025

16

Inflation curtails Japanese ‘Golden Week’ travels

Samsung fights US$520m India tax demand NEW DELHI: Samsung has asked an Indian tribunal to quash a US$520 million (RM2.2 billion) tax demand for allegedly misclassifying imports of networking gear, arguing officials were aware of the practice as India’s Reliance imported the same component in a similar manner for years, documents show. Samsung becomes the second major foreign company in recent months to challenge an Indian tax demand. Volkswagen has sued Prime Minister Narendra Modi’s government in court for a record demand of US$1.4 billion for misclassifying its component imports. In the Samsung case, tax authorities in January asked Samsung to pay US$520 million for evading the 10-20% tariffs by misclassifying imports of a key mobile tower equipment, which it then sold to billionaire Mukesh Ambani’s telecom giant, Reliance Jio, from 2018 to 2021. In its 281-page challenge at the Customs Excise and Service Tax Appellate Tribunal in Mumbai, Samsung criticises Indian authorities for being“fully aware”of the business model as Reliance had a “long-established practice” of importing the same equipment without any tariff payments for three years until 2017. Samsung’s India unit says it discovered during an Indian tax investigation that Reliance had been warned about the practice way back in 2017, but Reliance did not inform the South Korean company about it and tax officials never questioned Samsung. “The classification adopted by the appellant (Samsung) was known to the authorities, however the same was never questioned ... Department was fully aware,” Samsung says in its April 17 filing, which is not public but was seen by Reuters. “Reliance Jio officials did not inform” Samsung about the tax warning of 2017, it adds. Further details of Reliance’s 2017 warning from tax authorities are not public and were not disclosed in the Samsung filing. Other than US$520 million demand Samsung faces, Indian authorities have also imposed an US$81 million fine on seven of its employees, taking the total tax demand to US$601 million. The tax demand represents a substantial chunk of last year’s net profit of US$955 million for Samsung in India. – Reuters HK authority intervenes in market HONG KONG: Hong Kong’s de-facto central bank said it sold HK$46.54 billion (RM25.5 billion) into the market on Saturday to prevent the local currency from strengthening beyond its official peg to the US dollar, the first such intervention in more than four years. The Hong Kong dollar is pegged to a tight band between 7.75 and 7.85 per US dollar. The Hong Kong Monetary Authority intervened as the Hong Kong dollar touched the strong side of that currency convertibility range. The last time it sold Hong Kong dollars to defend the peg was in October 2020. “Seeing the HKD getting stronger means capital inflows, which is not problematic for Hong Kong,” said Gary Ng, senior economist at Natixis. The aggregate balance, the key gauge of cash in the banking system, will increase to HK$91.31 billion on May 7, a Hong Kong Monetary Authority spokesman said. – Reuters to check local currency’s rise

going out due to financial burdens” seems to be growing, Intage said. When it comes to travelling abroad, that is verging on being an “unattainable luxury”, it said. The same study, however, showed the average budget for Golden Week outings this year has edged up to US$201 from US$192, underscoring holidaymakers’ acceptance of the status quo. “It shows they are resigned to the fact that it just costs them more this year to do anything,” Intage’s Motohiro Shimogawara told AFP. Japan logged more than 36.8 million tourist arrivals in 2024, topping 2019’s record of nearly 32 million. The government has set an ambitious target of almost doubling tourist numbers to 60 million annually by 2030. But as in other global tourist magnets like Venice in Italy, there has been growing pushback from residents against overtourism. Residents and authorities in Japanese tourist hotspots, from tradition-steeped Kyoto to towns near the majestic Mount Fuji, are increasingly voicing frustration about overcrowding, traffic violations and bad behaviour by some visitors. – AFP

expensive at the onset of this year’s Golden Week than last year, according to a survey from the business daily Nikkei . All this has translated into a tepid desire among Japanese residents to travel for this year’s Golden Week, surveys have shown. The latter part of the holiday period began Saturday and lasts until tomorrow. “The biggest reason seems to be the inflation that has curtailed their willingness to spend lavishly”, Atsushi Tanaka, a tourism studies professor at Yamanashi University, told AFP. “Because the inbound tourism is booming so much, hotel operators don’t need to lower their accommodation prices, which is making it harder for Japanese people to travel,” Tanaka added. A poll by major travel agency JTB showed last month that 20.9% of its respondents will or “probably” will go on a trip during Golden Week, down 5.6% from last year. Another survey by marketing research firm Intage similarly found last month that the percentage of those planning to travel domestically during the holiday period dipped by two percent from a year earlier to 13.6%. While factors like a desire to avoid crowds are also at play, “the tendency to refrain from

TOKYO: Japan’s annual “Golden Week” holiday period gets into full swing on Saturday, but inflation and hotel prices sent soaring by record inbound tourism have left domestic travellers less eager to pack their bags. Traditionally, Golden Week – which includes three consecutive public holidays – gives Japanese workers one of their longest breaks in the year, with many taking the opportunity to see other parts of Japan or to travel abroad. But this year consumers in the world’s fourth-largest economy are feeling the pain of rising prices for everything from cabbage and rice to electricity bills. The Japanese yen has lost around a third of its value since 2022, one factor behind the record number of foreign tourists also lured by the country’s numerous attractions from Mount Fuji’s majestic slopes to shrines and sushi bars. The inflow of tourists has sent demand for hotel bookings spiralling upward, with the room rate in Japan’s five major cities around 16% more o Inflow of foreign tourists sends hotel prices soaring

People walking on a field of nemophila flowers at Hitachi Seaside Park during the ‘Golden Week’ holiday. – AFPPIC

US lawmakers urge SEC to delist China companies: FT WASHINGTON: Two Republican lawmakers have urged the US Securities and Exchange Commission to delist Chinese companies, including Alibaba Group, that they say have military links that put American national security at risk, the Financial Times reported last week. objectives of the Chinese Communist party . . . supporting military modernisation and gross human rights violations,” they said in the letter, according to FT . “They also pose an unacceptable risk to American investors.”

They said that the SEC had the tools and authority under the Holding Foreign Companies Accountable Act to suspend trading and compel delisting. The SEC, Alibaba, JD.com and Baidu did not immediately respond to Reuters requests for comment. The Select Committee on the Chinese Communist Party and the US Senate committee also did not respond to requests for comment. More than 100 Chinese companies are listed on US exchanges and have a collective market cap of around US$1 trillion. – Reuters

The companies also include search engine Baidu, online retail platform JD.com and the popular social media platform Weibo. The lawmakers said the Chinese companies were “ultimately harnessed for nefarious state purposes”, no matter how commercial they appeared on the surface, according to FT .

The chairman of the House China committee, John Moolenaar, and the chairman of the Senate committee on ageing, Rick Scott, wrote to SEC chairman Paul Atkins to take action against 25 Chinese groups, listed on US exchanges, FT said. “These entities benefit from American investor capital while advancing the strategic