It is probably good to live in a country with the highest standard of living in the world. Here you only need to learn, work and enjoy life, without worrying about the future. But is it that simple? The well-being of the country depends on many factors, and one of them is the tax system. In Japan, it is very different from those that exist in other countries.
NNU - National Tax Administration
The current tax system in Japan was formed back in 1950. Since then, only a few organizational and legislative changes have been made to it, but in general it has remained the same as before.
Taxes in Japan are monitored by the National Tax Administration, which is a structural unit of the Ministry of Finance. The national tax office usually deals with taxation, collection and suppresses cases of non-payment of all private and state departments. It also charges indirect taxes and taxes, such as consumption tax, alcohol, tobacco, gasoline, etc. In general, NNU manages all taxes in all spheres of human life, with the exception of customs duties and ship taxes.
Features of the political system
Japan is a unitary state, which is divided into 47 prefectures and about 2,000 municipalities. At the head of each prefecture is a prefect, which has its own legislative and administrative apparatuses. Despite the fact that Japan is a unitary state, there is a long tradition of local government autonomy. In 1947, the country adopted the Constitution, which enshrined the principles of local self-government.
Local authorities had great powers, in particular, they could set taxes independently and were not limited in their own rule-making. However, if local authorities intend to introduce a new tax, which is not prescribed by law, they must receive approval from the Minister of the Interior. A new tax cannot be established if it violates the basic requirements. The tax system in Japan is characterized by a small tax burden and wide tax opportunities of local authorities.
Tax groups
In addition to national taxes in Japan, citizens make other deductions. There are also local (prefectural and municipal) taxes. So what taxes do people pay in Japan?
The group of national taxes include taxes:
- for accommodation in the prefecture,
- corporate taxes
- for the acquisition of property,
- partial excise taxes on tobacco,
- vehicle taxes
- for entertainment
- to use natural resources.
Local taxes in Japan usually include the following:
- for accommodation
- property
- on land ownership
- for light vehicles
- on the development of cities.
They are collected by local authorities, which have their own tax offices independent of national ones.
The structure of tax bureaus
Taxes in Japan are a serious matter: with a population of 127 million people, more than 56 thousand employees work in the state tax administration. The central office and the regional tax bureau have the same functional structure. There are taxation, audit and criminal investigation departments for tax evasion incidents.
68% of employees are charged with income, corporate and consumer taxes. 15% of the tax system employees collect taxes, 17% manage the work. The Japanese tax system is characterized by a "division of labor":
- regional bureaus control the correctness of tax payments by large companies,
- tax inspectorates oversee small and medium-sized businesses.
Privileges
Also in Japan there is a preferential tax system. You can get a tax discount for various reasons:
- In order for taxation to be fair for different categories of citizens, the state introduced a special discount that reduces taxable income. Such a discount can be used by employees who sell their labor. The discount is equal to the amount of personal expense.
- Business revenues can be divided by taxation goals. When filling out the declaration, it is allowed to deduct from the income the cost of preparing the declaration, but not more than 100 thousand yen.
- Revenues such as rent differences for government-provided housing can be earned by working people or entrepreneurs.
- In Japan, families in which two spouses work and receive approximately the same income are encouraged. If someone is working alone, then the family bears a heavier tax burden.
Types of taxes
Today, there are about 50 taxes in Japan. The main tax revenues to the state treasury are income and taxes from legal entities. As for income tax in Japan, it is levied on all income that a person receives: it does not matter if they are official or not.
The Japanese are also required to pay inheritance tax, which they receive after the death of a friend or relative who made a will in their name. In the Land of the Rising Sun, a gift tax is also added in addition to the inheritance tax.
Consumer tax is 3% of the price of a product or service. It is considered indirect, since it is included in the price of the goods and paid by the buyer. Consumer tax does not apply to the purchase or sale of a land plot, payment for utilities, fees for admission to school, for examination in a hospital or for burial. However, there are several types of indirect taxes that are not covered, for example, the cost of alcoholic beverages includes 44% of the tax.
Taxes on transport and accommodation
There is also a local consumer tax in Japan that a person lives in a hotel or uses catering establishments. If the cost of a daily stay in a hotel exceeds 10 thousand yen, or if a person spent more than 5 thousand yen for dinner, then a tax of 3% is levied on him. Also, a person is charged a tax for visiting hot springs and using a golf course.
Each driver must pay a car tax in Japan, which consists of a consumer tax on the purchase, on the purchase of a car, on gasoline, the car itself and its weight.
The most important is the residence tax. They are taxed on the income of citizens and companies for the previous year. Moreover, even those who are currently unemployed, but who had incomes last year, should pay it. By the way, a person must calculate his income, tax amount and report this information to the local tax office. During the calculations, all income must be divided into 10 types: deposits, stock ownership, real estate, entrepreneurial activity, salary, and others. Each of these types is calculated in its own way, and all information must be submitted to the management no later than March 15. If you are late with the submission of information, the amount of tax will increase by 15%.
Other countries
Compared to other countries, taxes in Japan for 2018 are much higher. In the United States, the maximum tax rate is 28%, while in Japan (even after tax reforms that simplified the tax scale and reduced the percentage), it is 65%.
Corporate taxes are 37% for standard firms and 28% for small businesses. Owners of companies must enter information on income in a special form and submit it to the tax office no later than 2 months after the financial year of the company ends.
For ordinary people, taxes are calculated from the salary. If there is no additional income, the declaration may not be filed. However, the annual income should not exceed 15 million yen.
In Japan, of course, there is no corruption and people will never be stupid, but not every person who independently submits a declaration can be trusted. Therefore, tax administrations from time to time do spot checks on the correctness of filling out a declaration. They inspect particularly malicious defaulters - such inspections can only be carried out by court order. After such decisions, firms are searched, seized on clerical books and taken measures to find out the real financial situation of the company.
Bets
Japanese law provides for three types of bets:
- national
- prefectural
- municipal.
Each of these rates is differentiated by the amount of taxes that a citizen receives, and varies at certain intervals. Such intervals for national taxes are from 10 to 50%, prefectural - 3-5% and municipal - 2-13%. For each citizen, interest rates are different and depend on his income.
The maximum interest rate is charged to those who receive excess income. If some Japanese earned over 50 million yen in a year, then he should donate half of this amount for the benefit of the state. Minimum rates are given only to poor citizens whose monthly income is less than 275 thousand yen.
Despite the fact that the income tax in Japan and other deductions to the state treasury are very significant, residents do not think to complain. Salaries in Japan even pay such taxes. Paying such taxes, the Japanese also manage to save money for a "rainy day."