The Tax Commission’s Sub－Committee on the Taxation of Financial Assets met on May 16th 2003.
| The Tax Commission’s Sub－Committee on the Taxation of Financial Assets met on May 16th 2003. |
1. | Presentations were made on the subject of study trips to Sweden and Denmark (by Professor Okuno, Chair of the Sub-Committee) and the United States and Canada (by Professor Ishi, Chair of the Commission). Regarding the study trip to Denmark and Sweden, the main points of note were: | ||
| > | The relationship between the tax system’s deductions and allowances and the social security system’s benefits, in particular the fact that deductions are rather few in number compared to Japan, and the social security system is the main means of delivering welfare objectives | ||
| > | The relationship between the pension system and taxation | ||
| > | The definition and evaluation of dual income tax （this is a pragmatic tax system born of the need to restrict tax deductions for interest paid on transactions） | ||
Regarding the study trip to the U.S and Canada, the main points of note were: | |||
| > | An explanation of the relationship between the tax systems and social security systems | ||
| > | The systems of taxpayer identification numbers (the scope of the systems has gradually expanded, but is basically fixed now) | ||
| > | President Bush’s proposed elimination of double taxation on dividends through exempting individuals from taxation on received dividends (Ministry of Finance personnel made a report on the current state-of-play of the tax package) | ||
| > | The Canadian GST (Goods and Services Tax) system and GST Credit | ||
2. | Professor Yoshino made a presentation, followed by discussion by Committee members. The main points of the presentation were: | ||
| > | The selection of financial assets by households in the current environment (in particular the favoring of relatively safe assets such as deposit accounts in Japan) | ||
| > | The size of the financial services industry remains small compared to other sectors in Japan, so development is necessary | ||
| > | Regarding taxation: | ||
| i. | It is necessary to maintain neutrality between different kinds of financial products in the taxation system | ||
| ii. | There has been a strong preference among Japanese households for relatively safe, domestic financial assets. If this preference changes in the future, it will be necessary to think about the possible problem of capital flight | ||
3. | The next meeting of the Sub-Committee will be held on May 23rd 2003. | ||
Records (in Japanese) of the meetings of the Tax Commission and its Sub－Committees can be found at http://www.mof.go.jp/jouhou/syuzei/sy012.htm Further details of the fiscal year 2003 tax reforms can be found in English at http://www.mof.go.jp/english/tax/tax2003/tax2003_tr.htm Japanese documents, which go into more detail, can be found at http://www.mof.go.jp/jouhou/syuzei/syuzei04.htm | |||
