Since the change in government in 2009, the ruling Democratic Party of Japan has implemented legislation for improving the taxation systems. Here are some of the DPJ’s achievements.

[Improved the transparency and fairness of tax systems by eliminating or reducing special tax measures]

It has long been pointed out that the Special Measures concerning Taxation risk encouraging collusion between government institutions and particular industries because the measures reduce taxes in specific industries, regardless of the fact that the effectiveness of these measures are less than certain. In order to assess the practical application of these measures and examine their effectiveness, the DPJ government enacted the Improving Transparency of Special Taxation Measures Law”(provisional title) in March 2010. Since the change in government, the DPJ has reviewed 517 items regarding national and local taxes, abolished 135 items, and reduced 166 items in total. The first official report will be issued in 2013.

[Established corporate tax credits to boost employment]

In order to promote employment, the DPJ government established a taxation system that offers tax credits to companies based on the increase in the number of new employees. Whenever companies hire 10% more employees than the previous year, they are allowed to deduct 200,000 yen per new employee from their corporate tax payments. (The minimum number of new hires for this to apply is five, or two in the case of small and medium enterprises.) This system applies for fiscal 2011 to 2013.

[Promoted New Public Commons by revising the tax system for donations in support of NPOs]

Under the tax reforms in 2011, the DPJ Government simplified the requirements for organizations to be officially recognized as NPOs. In addition, those who made donations to certified NPOs are eligible for a tax credit of up to 25% of their income tax. Thus the DPJ continues to support NPOs through the comprehensive expansion of the tax system for donations.