Japan-- Tax

Taxation in Japan is based primarily upon a national income tax and a residential tax based upon one's area of residence. A consumption tax (currently 5%) was introduced in 1989.

Income Tax Rates in Japan:
Individual income tax rates in Japan are progressive, up to 40%.

Taxable income (Yen)          Tax Rate         Deduction (Yen)
0 – 1,950,000                         5%
1,950,000 – 3,300,000            10%             97,500
3,300,000 – 6,950,000            20%             427,500
6,950,000 – 9,000,000            23%             636,000
9,000,000 – 18,000,000          33%             1,536,000
Above 18,000,000                  40%             2,796,000

           While similarities between the taxation of companies and individuals do exist in Japan, the above refers largely to companies. Accordingly, outlined below are the basic rules and rates applicable to individuals. Given the complexity of this area, it is necessary to stress the need to seek professional advice. Non-resident taxpayers are taxed only on their Japanese source income. Non-permanent resident taxpayers are taxed on both Japanese source income plus that part of non-Japan source income that is paid in and/or remitted to Japan. A permanent resident taxpayer is taxed on his worldwide income.

Consumption Tax:

             The Liberal Democratic Party government of Masayoshi Ohira had attempted to introduce a consumption tax in 1979. Ohira met a lot of opposition within his own party and gave up on his attempt after his party suffered badly in the 1979 election. Ten years later Noboru Takeshita successfully negotiated with politicians, bureaucrats, business and labor unions to introduce a consumption tax,which was introduced at a rate of 3% consumption tax in 1989.

             In April 1997 under the government of Ryutaro Hashimoto it was increased to 5%. Shortly after the tax was introduced Japan fell into recession,which was blamed by some on the consumption tax increase.

             The Democratic Party of Japan came to power in the August 2009 elections with a promise not to raise the consumption tax for four years. Despite an internal battle that saw former DPJ leader Ichiro Ozawa and many other DPJ diet members vote against the bill and then leave the party, in June 26 2012 the lower house of the Japanese diet passed a bill to double the tax to 10%.The new bill increases the tax to 8% by April 2014 and 10% by October 2015.

Japan Project 4-- Government

     The politics of Japan is conducted in a framework of a parliamentary representative democratic monarchy where the Prime Minister of Japan is the head of government and the head of the Cabinet that directs the executive branch. Legislative power is vested in the Diet, which consists of the House of Representatives and the House of Councillors. Japanese politics encompasses the multiparty system. The judicial power is vested in the Supreme Court and lower courts. In academic studies, Japan is generally considered a constitutional monarchy with a system of civil law.

Emperor of Japan
           The Emperor is the symbol of the state and of the unity of the people.Though the emperor's official status is disputed, on diplomatic occasions the emperor tends to behave as the head of state.He also appoints the Prime Minister and the Chief Justice of the Supreme Court as designated by the Diet and the Cabinet respectively. The Imperial Throne is dynastic and succeeded from father to son.

Diet--the Legislative Branch
            The National Diet, composed of two houses - the House of Representative (lower house, 480 members) and the House of Councilors (upper house 242 members), is the sole law-making organ of the State.  The term of office for the elected member of the upper house is six years, and the term of office for this house is limited to four years.
             Both Houses have the same power with some exceptional cases in which the decision of the House of Representatives precedes that of the House of Councilors.

Cabinet-- the Executive Branch
            The Cabinet, which consists of the Prime Minister and not more than 17 Ministers of State, is collectively responsible to the Diet. If the House of Representatives passes a non-confidence resolution or rejects a confidence resolution the Cabinet shall resign en masse. 
            Prime Minister is designated from among the members of the Diet by a resolution of the Diet and appointed by the Emperor. Prime Minister appoints the Ministers of States and may dismiss them as he chooses. The Prime Minister, representing the Cabinet, submits bills to the Diet, reports to the Diet on general national affairs and foreign relations, and exercises control and supervision over various administrative branches.

Judiciary Branch          
              The Justices of the Supreme Court, except the Chief Justice who is appointed by the Emperor, are appointed by the Cabinet. The Judges of inferior courts are also appointed by the Cabinet but only from a list of persons nominated by the Supreme Court.
        The Japanese constitution, which went into effect on 3 May 1947 includes a bill of rights similar to the United States Bill of Rights, and the Supreme Court has the right of judicial review. 

Major Political Parties
THE LIBERAL DEMOCRATIC PARTY
              A union of centrist and right wing parties created with US support after the second world war, the Liberal Democrats governed Japan almost uninterruptedly from 1955 to 2009, before returning to power in a landslide victory in 2012. Elite bureaucrats collaborated closely with the party and interest groups in drafting and implementing policy. The party lacked a strong, nationwide organization or consistent ideology, but it functioned efficiently as a locus for matching interest group money and votes with bureaucratic power . 
             The LDP traditionally identified itself with a number of general goals: rapid, export-based economic growth; close cooperation with the United States in foreign and defense policies; and several newer issues, such as administrative reform. 

THE DEMOCRATIC PARTY
              The DPJ, Japan's second largest political party, was formed in the late 1990s as a result of the merger of several anti-LDP parties. Its membership covers a broad spectrum of political beliefs, but it is generally perceived as a center-left party.In 2009, it became the first opposition party to beat the Liberal Democrats in an election for the lower House. It promised to cut waste and shift spending priorities “from concrete to people” – meaning fewer dams and highways and more money for social services such as childcare.