Companies given preferential treatment in government procurement if they increase wages


(last update: January 7, 2022)

The New Capitalism Council led by PM Kishida met on 8 November setting out priorities for the Kishida Cabinet. The Council replaces the Growth Strategy Council set up by the previous government.  The new Kishida Cabinet has made ‘re-distribution’ a major plank of its policies, away from the policies of the past decade which gave business interest prevalence under the expectation that economic growth would trickle down to the general population.


As part of a more active government policies to ensure that the broader populations profits from Japanese businesses successes, the government is also considering changes to its government procurement practices. Concretely, this would mean that suppliers who provide structural wage increases to their employees, would receive preferential treatment in the awarding of government procurement contracts by central government entities (WTO Annex 1 and Annex 3) larger than ¥15 million.

Concretely, the new rules will mean that companies can obtain additional points in case of competitive tenders where the Overall Greatest Values assessment method is used, if they can show that they are structurally increasing their employees wages. For large companies this increase has to be larger than 3% and for SMEs 1.5%. Companies wishing to make use of this preferential measure, will therefore have to submit documentation to prove this. According to Ministry of Finance data, close to 40% of all government procurement would fall under this new measure and if single tenders are taken out, it would amount to 75% of all competitive tenders. 

The new measure is scheduled to be implemented at the beginning of FY2022 in April. 


Source: Asahi Shimbun Digital, November 8, 2021, Asahi Shinbun Digital, January 7, 2022

EU-Japan Centre's News

Slovak Investment and Trade Development Agency (SARIO) and the Slovak Embassy in Tokyo sincerely…
The EU-Japan Centre’s office in Tokyo is regularly publishing "Industry and Policy News”. By…
Organised on 19 and 20 June 2023, in Cluj-Napoca, Romania. Cluj-Napoca will host The Romanian…
The EU-Japan Centre is pleased to start a new weekly service by publishing brief summary of the…
The Embassy of Belgium, together with the Belgian regional trade offices, cordially invites you to…
The EU-Japan Centre is pleased to start a new weekly service by publishing brief summary of the…


03/07/2023 - 04/07/2023
Lean in Europe takes small groups of people interested in process improvement to a company to learn how it uses lean tools to drive its activities be that in manufacturing, services…
03/07/2023 - 04/07/2023
Lean in Europe #30 - 03 & 04 July 2023 in Treviso This visit will look at lean in machining for the aeronautic, aerospace and energy industries. Apply now via this webform (application deadline…
Subscribe to
our newsletters

The EU-Japan Centre currently produces 5 newsletters :

  • EU-Japan NEWS - our flagship newsletter covering the Centre's support services, information about EU (or Member States) - Japan cooperation
  • Japanese Industry and Policy News
  • “About Japan” e-News (Only available for EU companies / EU organisations)
  • Japan Tax and Public Procurement Weekly Tender Digest (Only available for EU companies / EU organisations)
  • Tech Transfer Helpdesk Newsletter