Japanese Experts To Study European Tax Systems

by Mary Swire, Tax-News.com, Hong Kong

23 August 2004

The Japanese government’s Tax Commission is planning to send a fact-finding delegation to Europe later this month to gather information on the tax and social security systems of certain nations.

According to reports in the national media, the Finance Ministry revealed last Thursday that panel members will be despatched to Sweden, Norway, Denmark and France from August 29, and will report back to the Commission in September when discussions over Japan’s 2005 fiscal reforms are due to commence.

It is interesting to note that all of the above countries feature VAT rates above 20% and are characterised as high-tax welfare states.

Repeated calls by the head of the Tax Commission, Hiromitsu Ishi, to increase Japan’s consumption tax rate of 5% to European levels have provoked a negative response, not least from Prime Minister Junichiro Koizumi who has pledged to resign rather than see this levy increased.

Presenting a report last month, Ishi also suggested that previous tax cuts should be repealed and income and inheritance taxes hiked in order to meet the rising cost of supporting the country’s ageing population.

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